Yes Bank to raise $2 billion through preferential allotment of shares
Private sector lender Yes Bank has decided to raise up to two billion dollars (about Rs 14,300 crore) through preferential allotment of shares.
Eight new investors have expressed interest in acquiring a fresh stake in the bank, according to a late night communication to stock exchanges issued after a marathon meeting of the board of directors on Friday.
These include three institutional investors and five family offices. Canadian industrialist Erwin Singh Braich and SPGP Holdings that is backed by Braich will be bringing in the largest chunk of 1.2 billion dollars.
However, Yes Bank said that discussions are still on and will conclude shortly. Also, the binding term sheet received from them has been extended till December 31.
Aditya Birla Family Office has shown interest to infuse 25 million dollars, Citax Holdings Ltd and Citax Investment Group 500 million dollars, GMR Group and Associates 50 million dollars and Rekha Jhunjhunwala 25 million dollars.
A top tier US fund house will bring in 120 million dollars, Discovery Capital 50 million dollars and Ward Ferry 30 million dollars. None of the investors will be allotted equity shares such that their holding exceeds 25 per cent of the bank’s share capital.
“The board of directors will reconvene on December 10 to finalise and approve the details of the preferential allotment. It will also convene an extraordinary general meeting subsequently to obtain the approval of the shareholders.” said the statement issued by Yes Bank.
The preferential allotment will be subject to regulatory and statutory approvals. According to rules of the Reserve Bank of India (RBI), any acquisition of shareholding or voting rights of five per cent or more will be subject to obtaining prior approval from the regulator.
In case of financial institutions, the shareholding has been capped at 10 per cent.
Yes Bank is India’s fourth largest private sector bank with presence across all 28 states and 9 union territories. It has been striving to fund its growth and improve asset quality.