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Last Updated : Jan 10, 2020 09:32 PM IST | Source: Moneycontrol.com

Yes Bank to raise Rs 10,000 crore via mix of equity, debt; board rejects Erwin Singh Braich's investment proposal

The bank is looking to raise funds to the tune of Rs 10,000 crore by issuing securities.

 
 
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The board of Yes Bank on January 10, approved raising Rs 10,000 crore fresh capital via a mix of debt and equity.

The board also decided to not proceed with the proposed investment offer of Erwin Singh Braich/SPGP Holdings, while it is open to consider the $500 million offer from Citax Holdings and Citax Investment Group in the next meeting.

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The bank’s release to the stock exchange said that the board of directors at the meeting today approved, "raising of funds up to Rs 10,000 Crore, in one or more tranches, on such terms and conditions as it may deem fit, by way of issuance of securities including but not limited through Qualified Institutions Placement (QIP)/ Global Depository Receipts (GDRs)/American Depository Receipts (ADRs)/ Foreign Currency Convertible Bonds (FCCBs)/or any other methods on private placement basis."

Yes Bank also said that it had received an updated proposal from Braich, with an extended validity until January 31 that the board has rejected. Canadian industrialist and philanthropist Braich, the founder of The Braich Group of Companies and Trusts,  made a $1.2 billion bid last month that was valid till December 31.

The private lender told the exchanges that it will convene an extra-ordinary general meeting to obtain shareholders’ approval to raise funds.

Braich and Citax were among eight new investors that had expressed an interest in acquiring a stake in the bank. These included three institutional investors and five family offices.

Aditya Birla Family Office had shown interest to infuse $25 million, Discovery Capital has shown $50 million, GMR group & associates $50 million and Rekha Jhunjhunwala offered to infuse $25 million. However, on December 10, the board decided to consider offers from Braich and Citax.

“None of the investors will be allotted equity shares such that their holding exceeds 25 percent of the share capital of the bank,” the private lender said on November 30.

In a separate communication, Yes Bank informed exchanges that its Independent Director Uttan Prakash Agarwal had resigned from his post before the board meeting held on January 10. He expressed his discontent with the bank’s ongoing capital raising exercise.

While Agarwal also cited a failure in corporate governance and compliance as reasons for his resignation, Yes Bank said that the lender was reviewing his ‘fit & proper’ status for the role under directions from the regulator.

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First Published on Jan 10, 2020 05:20 pm
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