Yes Bank mulls Citax Holdings offer, Erwin Singh Braich still in fray

A security personnel waiting outside YES Bank's ATM
Private sector lender Yes Bank has told the exchanges it is considering the $500 million offer made by Citax Holdings and Citax Investment Group. A decision regarding allotment will be taken at the next board meeting.

The note said, “The Board is willing to favourably consider the $500 million offer made by Citax Holdings and Citax Investment Group and the final decision regarding allotment will follow at the next board meeting, subject to requisite regulatory approval(s).”

Yes Bank also told the exchanges it is still considering the binding offer of $1.2 Billion offer from Canadian businessman Erwin Singh Braich and SPGP Holdings.

The lender has already extended the deadline for the binding term sheet for Erwin Singh Braich and SPGP Holdings to December 31 from November 30.

The note also said the bank is evaluating other potential investors to raise capital up to $2 billion.

In a late night communication on November 30, the bank told the exchanges it has increased the size of its equity capital offer to $2 billion from $1.2 billion earlier on “strong interest” shown by NRI investors.

Other prominent suitors are the Aditya Birla Family Office ($25 million), GMR Group and Associates ($50 million), and Rekha Jhunjhunwala ($25 million). Besides, a top-tier US fund house has evinced interest to invest $120 million. Discovery Capital will take $50 million and Ward Ferry, another $30 million.

The bank said in the note that these shares will be issued on preferential allotment. None of the investors will be allotted equity shares such that their holding exceeds 25 per cent of the baank's share capital.

Global rating agency Moody’s on Thursday downgraded the bank’s long-term foreign currency rating from “Ba3” to “B2”. Moody’s said the bank has potentially stressed assets and low loss-absorbing buffers which may add pressure to its funding and liquidity. This may create additional risks to its standalone credit profile.

YES Bank’s regulatory capital adequacy ratio (Basel III) stood at 16.3 per cent (CET-I of 8.7 per cent and Tier-I of 11.5 per cent) as on September 30.

The Reserve Bank of India (RBI) has also identified several lapses and regulatory breaches in various areas of the bank’s functioning in fiscal 2018. The divergence includes higher non-performing loans and lower profitability as compared to the metrics disclosed by YES Bank in fiscal 2019. This is the third year when the RBI identified a divergence in the bank’s reported financials.

The stock closed today 10.5 per cent lower at 50.55 on the BSE.


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