Tuesday, May 11

North American family office eyes Yes Bank stake, plans to buy more than a third for $1.2 billion

MUMBAI: The global investor which has submitted a binding bid to invest $1.2 billion in Yes Bank is a North American family office that is interested in picking up more than a third of the bank’s shareholding. The bid offer was supported by a letter by a large bank confirming the ability of the investor to put in the money. “We have a nondisclosure agreement with the investor. The bank’s capital-raising committee could meet as early as next week to decide on the proposal and, should they approve it, the name will be made public,” said Yes Bank MD & CEO Ravneet Gill.

Gill said that the bank has received investment proposals worth a total $3.05 billion from three sets of investors. Besides the North American family office, there was a proposal to invest $1.5 billion by a consortium of six private equity and two domestic mutual funds. The third category which was interested in investing $350 million included two large reputed financial investors and two family offices.

The binding bid for $1.2 billion is valid up to end November. The North American investor, with multi-billion dollar assets, has made investment in financial services and energy assets in other countries.

Gill said that he received an electronic mail from the investor providing a binding bid at 8 am on Thursday. He, along with the head of investor relations, decided to check with the markets regulator on the need for a disclosure requirement. The markets regulator confirmed that this was unpublished pricesensitive information and should be disclosed. The bank also informed the RBI over the phone and through mail.

Gill said that the capital-raising committee of the board could decide on any of the offers or a combination of them. The bank had earlier looked at raising around $1.35 billion. The family office in its bid had said that it was willing to buy shares at a two-week average price or a mutually agreed price. RBI rules cap a bank shareholder’s voting rights at 15%. Given the cap on voting and the fact that the foreign office is only a financial investor, the expectation is that there will not be any need for an open offer although this is not a qualified institutional buyer.

Earlier, there was market speculation that the investor who had put in the $1.2-billion bid was Hong Kong-based SPGP Holding. Gill’s statement makes it clear that the speculation is not correct.

The private lender on Friday reported a net loss of Rs 600 crore for the quarter ended September due to provisions of Rs 709 crore towards adjustment in the value of deferred tax assets following the reduction in tax rates. The bank had also reported a 42% rise in provisions for bad loans at Rs 1336 crore.

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