North American family office points to bank stake

MUMBAI: The global investor who has submitted a binding offer to invest $ 1.2 billion in Yes bank is a North American family office that is interested in acquiring more than a third of the bank's shares.

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.

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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 Investment funds . The third category that was interested in investing $ 350 million included two major reputations. financial investors and two family offices.

The binding offer for $ 1.2 billion is valid until the end of November. The American investor, with multi-million dollar assets, has made investments in financial services and energy assets in other countries.

Gill said he received an email from the investor with a binding offer at 8 am Thursday. He, together with the head of investor relations, decided to consult with the market regulator about the need for a disclosure requirement. The market regulator confirmed that it was confidential, unpublished information about the price and should be disclosed. The bank also informed the RBI by phone and by 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.

Previously, it was speculated in the market that the investor who had submitted a $ 1.2 billion offer was Hong Kong-based SPGP Holding. Gill's statement makes it clear that the speculation is not correct.

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