SBI to invest ~7,250 cr to rescue YES Bank
State Bank of India (SBI) on Thursday said it would infuse ~7,250 crore into ailing YES Bank to buy up to 49 per cent equity as part of the Reserve Bank of India-mandated bailout plan. SBI will pick up 7,250 million shares at ~10 each, and its shareholding will remain within 49 per cent of the paid-up capital of the private sector lender.
State Bank of India (SBI) on Thursday said it would infuse ~7,250 crore into ailing YES Bank to pick up to 49 per cent equity as part of the Reserve Bank of India-mandated bailout plan.
SBI will pick 7,250 million shares at ~10 each, and its shareholding will remain within 49 per cent of the paidup capital of the private sector lender.
Under the restructuring scheme, the authorised capital shall stand altered to ~5,000 crore.
The number of equity shares will stand altered to 24,000 million of ~2 each aggregating to ~4,800 crore.
SBI’S stake in altered capital is expected to be 30 per cent, going by the restructuring scheme. “The executive committee of the central board at its meeting on March 11 accorded approval for purchase of 7,250 million shares of YES Bank at a price of ~10 a share, subject to regulatory approvals,” SBI said in an exchange filing on Thursday.
Under the reconstruction scheme, SBI is to buy up to 49 per cent of YES Bank and cannot reduce its holding below 26 per cent for the next three years. The SBI investment of ~7,250 crore is much higher than the ~2,450 crore it had planned initially for 49 per cent stake in the private sector lender.
Last week, SBI Chairman Rajnish Kumar had said the bank would invest ~2,450 crore to buy 2,450 million shares of YES Bank. SBI was also in talks with other investors, and SBI investment would not exceed ~10,000 crore.
On March 5, the RBI had imposed a moratorium on YES Bank, restricting withdrawals to ~50,000 per depositor till April 3.
The RBI also superseded the board and placed it under an administrator, Prashant Kumar, who is a former deputy managing director and chief financial officer of SBI.
The administrator will take on board results for third quarter on Saturday. The final restructuring scheme is expected to be finalised on Friday.
YES Bank is banking on investment by SBI, speedy resolution with support from the RBI and SBI, and fundraising plans to instil confidence among customers, according to administrator.