Yes Bank Ltd. said it has delayed its third-quarter earnings as the private lender is reviewing non-binding expressions of interest from four investors.
Yes Bank has received non-binding EoIs from JC Flowers & Co. LLC, Tilden Park Capital Management, OHA (U.K.) LLP and Silver Point Capital, according to its exchange filing on Wednesday. The bank, which had to declare its October-December results by Feb. 14, will now report earnings on or before March 14.
“The bank and its financial advisors are currently in discussions with these investors on the commercial terms, including pricing, of their investments,” the filing said. The investments will be “subject to certain conditions and receipt of requisite approvals, including regulatory approvals with respect to the size of the stake to be acquired, as well as necessary dispensations with regard to applicable pricing guidelines”.
According to a person aware of the development, who spoke on the condition of anonymity since details aren't public yet, the investors will need approvals from the Reserve Bank of India as they are looking to acquire more than the 10 percent stake limit for a single investor. They will also need approvals from the Securities and Exchanges Board of India as they seek to invest at lower than the current market price, the person said.
On Feb. 7, the bank's shareholders approved raising Rs 10,000 crore through qualified institutional placement, American Depository Receipts, Global Depository Receipts and other forms of fund raising. The bank's previous plan to raise $2 billion from a clutch of investors was stalled after its board decided not to proceed with an offer from Canadian investor Erwin Singh Braich and SPGP Holdings.
The bank needs capital as its common equity Tier-1 ratio is close to the regulatory minimum of 8 percent. The fund-raising will not only help the bank shore up regulatory capital but also help in providing against the sizeable stressed assets on its book. As on Sept. 30, the bank's gross non-performing assets stood at 7.39 percent of its gross advances.
The bank's stock ended 4.48 percent lower on Wednesday compared with a 0.77 percent rise in the Nifty 50 Index.
Watch | S&R Associates' Sandip Bhagat on how the regulators may react to the Yes Bank's decision.
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