Yes Bank to raise nearly $2 billion through preferential share allotment; board to meet on Dec 10

The bank said it in a late-night release filed with the exchanges. It also added that it would raise the money in a share sale with a Canadian billionaire Erwin Singh Braich who will buy more than half of the banks' shares for around $1.2 billion.

The rest will be taken up by private equity investors. Yes Bank's decision to sell its shares is taken in order to help it overcome its financial constraints. However, the share sale plan is subject to regulatory approvals. The private sector lender said that it is holding discussions with Braich and the talks will be concluded soon. The bank has also extended the binding term sheet for the deal till December 31, 2019.

Apart from Braich, eight new investors have evinced interest in buying a fresh stake in Yes Bank. These comprise three institutional investors and five family offices, the bank said.

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Meanwhile, other investors who will infuse funds in the banks are Aditya Birla family office that has shown interest in buying shares worth $25 million, Rekha Jhunjhunwala ($25 million), GMR group and associates ($50 million) and Citax Holdings Ltd. & Citax Investment Group ($500 million). The bank further stated that a top tier US fund house will also buy shares worth $120 million whose name it is yet to disclose.

Foreign funds such as Ward Ferry and Discovery Capital will bring in $30 million and $50 million respectively, according to Yes Bank.

"In light of the above, the board of directors has today taken a decision to raise up to $ 2 billion through preferential allotment at a price in accordance with Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 [Higher of 2 weeks or 26 weeks average price]. None of the Investors will be allotted equity shares such that their holding exceeds 25% of the share capital of the bank," the bank said in the notice.

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Yes Bank further articulated that its board of directors will meet again on December 10 to conclude and sanction the details of preferential allotment. The bank also said that it will call for an extraordinary general meeting to get the shareholders' approval.

Yes Bank's shares ended at Rs 68.30 on Friday, down by 2.50% from its previous closing. The bank's stock closed at Rs 70.05 on Thursday.

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