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    Yes Bank gets binding offer of $1.2 billion from Hong Kong's SPGP Holdings, sources say

    finance | IST

    Yes Bank gets binding offer of $1.2 billion from Hong Kong's SPGP Holdings, sources say

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    The mid-sized lender has been passing through a barrage of troubles since August last year when the RBI refused to give co-founder and chief executive Rana Kapoor a new term and instead asked him to leave the bank by January 31, 2019, on governance lapses.

    Yes Bank has received a binding offer from a global investor for an investment of $1.2 billion through fresh issuance of shares, the bank told stock exchanges. Sources told CNBC-TV18's Nisha Poddar, Yes Bank has received this binding offer from Hong Kong's SP Global Partners Holdings.
    The bank will study the proposal during its board meeting on November 1, 2019.
    Yes Bank denied to confirm the name of the investor but said in a statement to the stock exchanges, "The Bank continues to be in advanced discussions with other global and domestic investors."
    Query sent to SPGP did not get any response. The company had earlier shown interest in buying Reid & Taylor through the IBC process and is actively scouting at several distressed assets in India.
    On September 25, 2019, Yes Bank announced its capital raising plans and said it has received "strong interest" from multiple foreign as well as domestic private equity and strategic investors for the capital raise.
    The bank had said, "It remains firmly on course to raising growth capital subject to necessary approvals."
    Shares of Yes Bank jumped post the announcement and closed the day higher by 23.77 per cent, at Rs 70.30 per piece.
    Yes Bank shares jump as it receives binding offer from a global investor worth $1.2 billion Yes Bank shares jump as it receives binding offer from a global investor worth $1.2 billion
    On October 11, CNBC-TV18 reported Yes Bank's promoter family's willingness to dilute stake if a large investor came in.
    Shagun Gogia, late Ashok Kapur’s daughter and part of Yes Bank’s co-promoter family, said that the Kapur family will extend its full support to the bank’s management in its capital raising exercise.
    Gogia and family currently hold over 8.3 percent stake in Yes Bank and are the single largest shareholders after the other promoter Rana Kapoor group’s holding recently fell to 0.8 percent due to pledged share sale by Reliance Nippon Asset Management.
    In a recent development, the bank's senior group president and former chief financial officer Rajat Monga, once touted as the man Friday of former CEO Rana Kapoor, called it quits.
    The announcement was made by Chief Executive Officer Ravneet Gill on October 3 during a conference call with investors and analysts following a heavy plunge in the bank's share price over the past few sessions.
    Earlier in August, the bank had raised Rs 1,930.46 crore through qualified institutional placement (QIP) to fund its business expansion.
    According to an Economic Times report dated October 7, Yes Bank was in talks with private equity firms TPG, The Carlyle Group and Farallon Capital.
    Another report in Mint said three top technology companies, including Microsoft, are interested in buying a strategic stake in the bank. These talks began three weeks ago, and Yes Bank could reportedly sell as much as 15 percent through equity issuances.
    The mid-sized lender has been passing through a barrage of troubles since August last year when the RBI refused to give co-founder and chief executive Rana Kapoor a new term and instead asked him to leave the bank by January 31, 2019, governance lapses.
    Ravneet Gill, who took over in March, discovered many chinks in the balance-sheet, which had to be provided for, resulting in the bank reporting its maiden loss in the March 2019 quarter. The balance sheet size has been shrunk by around 4 percentage points since then as a result of the same.
    Yes Bank's share price, which had received continuous drubbing since August 2018 when Kapoor's reappointment was blocked had hit a rock bottom of Rs 32 in early October. The stock was trading at Rs 397 in August last year.
    Gill had attributed the recent mayhem to the mutual funds selling pledged shares and also Kapoor nearly exiting the bank (from close to 13 percent stake his stake is down to under 1 percent) but reiterated that the stock price does not fully reflects the bank's operational performance.
    (With PTI inputs)
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