Money & Banking

YES Bank says ‘no’ to Braich offer; to raise ₹10,000 crore via equity, debt

Our Bureau Mumbai | Updated on January 11, 2020 Published on January 10, 2020

Private sector lender YES Bank has outlined a modified capital-raising plan, where it intends to raise up to ₹10,000 crore through a mixture of equity and debt. Significantly, it has decided not to proceed with the investment proposal of $1.2 billion by Canadian billionaire Erwin Singh Braich and SPGP Holdings, but will examine the $500-million proposal from Citax Holdings at the next board meeting.

“The board, at their meeting, approved raising of funds up to ₹10,000 crore in one or more tranches... by way of issuance of securities, including but not limited through Qualified Institutions Placement, Global Depository Receipts, American Depository Receipts, Foreign Currency Convertible Bonds or any other methods on private placement basis,” it said in a regulatory filing after its board meeting on Friday.

The lender further said that it has received an updated proposal from Braich and SGPG Holding extending the validity of its offer until January 31 for the bank’s consideration and further evaluation. “However, the board has decided not to proceed with the offer,” it said.

Regarding the proposed investment by Citax Holdings and Citax Investment Group, the bank said the board was also favourably considering it. “However, the relevant conditions precedent could not be completed as on date. Hence, Citax offer will be taken up during the next round,” said YES Bank.

The private sector lender has been trying to raise funds to shore up its capital base. Its CET-I ratio stands at 8.7 per cent, which is just above the regulatory requirement of 8 per cent.

The bank had, on November 29, said it planned to raise about $2 billion through the preferential allotment of shares. A significant chunk of this ($1.2 billion) was expected to come from Braich and SGPG Holdings.

Other proposed investors included Citax Holdings and Citax Investment Group, as well as a top-tier US fund house, which the bank said was willing to invest $120 million but did not disclose its name.

Analysts and rating agencies have also been waiting for clarity on the bank’s capital-raising plans. It has also seen a downgrade in its ratings by a number of rating agencies.

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Published on January 10, 2020
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