Yes Bank allots 1,000 crore equity shares to SBI and 7 private banks

Crisis-hit Yes Bank has allotted 1,000 crore equity shares to seven private banks and the state-run State Bank of India for a total consideration of Rs10,000 crore.

IDFC First Bank is the latest to enter the SBI-led rescue team with an investment of Rs250 crore. Investment by private banks has so far reached Rs3,950 crore.

Financially troubled Yes Bank reported a standalone net loss of Rs18,560.31 crore for the third quarter of the financial year 2019-20. This is amongst the biggest losses reported by the India Inc.

At present, the private lender is under a moratorium and is controlled by the office of the administrator appointed by the RBI.

The bank had reported a net profit of Rs1,001.85 crore during the corresponding period of the previous financial year.

Besides, the bank’s total income fell to Rs 6,268.50 crore from Rs 8,849.81 crore earned during the October-December quarter of the previous fiscal.

On consolidated basis, Yes Bank reported a net loss of Rs18,564.24 crore for the December quarter from a net profit of Rs1,000.57 crore in the corresponding period of the previous fiscal.

In a regulatory filing, Yes Bank said: “395,00,00,000 equity shares have been issued and allotted to the (private) investors for an aggregate subscription consideration of Rs 39,50,00,00,000, calculated at a share price of Rs 10 per equity share comprising of Rs 2 face value and Rs 8 premium.”

Further, SBI which would hold 49 per cent stake in the cash-strapped lender has been allotted 605 crore shares for Rs6,050 crore. Under the Reserve Bank-proposed reconstruction scheme for Yes Bank, SBI shall not reduce its holding below 26 per cent before completion of three years from March 14.

SBI, the largest public sector bank in the country, has in fact committed Rs7,250 crore. On Thursday, it said that its Executive Committee of Central Board (ECCB) has approved the purchase of 725 crore shares in Yes Bank at Rs 10 per share.

Among the private players, ICICI Bank and Housing Development Finance Corporation committed Rs1,000 crore each. Axis Bank and Kotak Mahindra Bank committed to invest Rs600 crore and Rs500 crore respectively. Both Federal Bank and Bandhan Bank have been allotted shares for Rs300 crore each as per their commitment and IDFC First Bank has been issued equity shares in the crisis-ridden bank for a consideration of Rs250 crore.

The private investors including the banks will be mandated to have a lock-in period for 75 per cent of their investment in the bank. The remaining 25 per cent of the shareholding allotted to each investor shall be freely transferable and shall not be subject to any lock-in.

The government on Saturday notified the scheme of reconstruction for cash-strapped Yes Bank Ltd., paving the way for the lender to resume full operations.

The private sector bank has been put under a moratorium by the Reserve Bank of India since March 5 which has restricted deposit withdrawals. Under the terms of the notified scheme, this moratorium will now be lifted at 6 pm on March 18.

According to the government notification, Yes Bank’s authorised share capital will be revised upwards from Rs1,100 crore to Rs6,200 crore. The number of total equity shares will stand altered to 3,000 crore of Rs2 each aggregating to Rs6,000 crore. Authorised preference share capital shall continue to be Rs200 crore.

The government has also decided to exempt all investors in the Yes Bank from payment of capital gains tax for any deemed profit or gains on account of subscription of shares.

The office of the administrator of Yes Bank shall also stand vacated after seven days from the cessation of moratorium and the new Board will take over the bank.

Prashant Kumar, former SBI CFO, and the current administrator of Yes Bank may take over as Managing Director and CEO of the bank.

Yes Bank posts staggering Q3 standalone net loss of Rs18,560 cr (Ld)

The independent auditor’s review report on the consolidated results pointed out that there is a “material uncertainty related to going concern” of the bank.

“The said assumption of going concern is dependent upon the degree of success of the final reconstruction scheme, the quantum of capital infused into the bank and the bank’s ability to stabalise its deposit balances post withdrawal of the moratorium by the RBI. Our conclusion is not modified in respect of this matter,” the auditor said.

Agencies