Moneycontrol
Last Updated : Nov 26, 2018 05:37 PM IST | Source: CNBC-TV18

Yes Bank promoter companies prepay Rs 400 cr loans to two MF firms: Report

Yes Bank promoters prepaid Rs 200 crore each to Reliance Mutual Fund and Franklin Templeton Mutual Fund thereby reducing the total outstanding loans of Yes Bank promoters to the funds to Rs 1,400 crore, sources told the TV channel.

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Yes Bank promoter companies have prepaid Rs 400 crore loans to two mutual fund companies, reported CNBC-TV18.

The news came after shares of Yes Bank slipped nearly 4 percent on November 26 due to investor concerns over non-convertible debenture (NCD) holdings by the two mutual funds - Reliance Mutual Fund and Franklin Templeton.

Yes Bank promoters prepaid Rs 200 crore each to Reliance Mutual Fund and Franklin Templeton Mutual Fund thereby reducing the total outstanding loans of Yes Bank promoters to the funds to Rs 1,400 crore, sources told the TV channel.

A recent report by Bloomberg highlighted that Morgan Credits Pvt., one of the vehicles under which Yes Bank CEO and Managing Director Rana Kapoor’s family holds its bank’s stake, offers the family 'a neat way to monetise its shares without pledging them'.

“To raise money, Morgan issued zero-coupon, nonconvertible debentures maturing in 2021, and it promised that the borrowed amount plus accrued interest will always be less than half of the market value of its holdings in Yes Bank,” the report said.

Across plans, the Reliance Mutual Fund seems to own the entire Rs 1,160 crore ($163 million) raised by Morgan Credits. Franklin Templeton Mutual Fund holds most of Rs 630 crore loans through zero-coupon notes issued by Yes Capital India Pvt., another of Kapoor’s vehicles.

The two fund investors feared ratings assigned to NCDs could be shaky after the steep fall in the mid-sized private sector bank's stock price in the past few months.

In September, the Reserve Bank of India (RBI) cut short the proposed tenure extension to Rana Kapoor from three years to five months.

With Kapoor set to step down as the chief of the bank on January 31, 2019, the process to appoint a successor has been met with several challenges including multiple resignations from its board.

Also Read: Reporter's Take | What The Top-Level Resignations At Yes Bank Mean
First Published on Nov 26, 2018 05:37 pm
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