Wednesday, August 12, 2020


Yes Bank's largest suitor, Braich could not pay Rs 2 cr

December 04, 2019 12:16 PM

NEW DELHI:Erwin Singh Braich and SPGP who put in a $1.2 billion bid for Yes Bank shares was not even able to pay up Rs 2 crore for earnest money in the Reid & Taylor bid under NCLT earlier this year.

SPGP is a Hong Kong-based fund that could not pay up in the Reid and Taylor case. Erwin Singh Braich-backed SPGP has also been involved in a few lawsuits, including one against the Canadian government.

The largest bid is the binding bid that Yes Bank has disclosed is for $1.2 billion. Yes Bank has disclosed that it has investors were willing to put in $2 billion of capital funds into the bank.

Analysts estimate that $1.82 billion out of $2 billion are doubtful bids. The second highest bid is from Citax Holdings for $500 million. The Citax group has companies incorporated in India, UAE and UK but has a limited balance sheet size.

The second highest bidder Citax also failed to bring in the bid security amount of Rs 100 million for their bid for Nagarjuna Oil under NCLT proceedings under IBC. In addition, the filings in the United Kingdom show that their balance sheet size is limited.

Analysts say that these two bids which are the largest at $1.82 billion do not inspire confidence and are unlikely to get RBI approval since the equity bid is more than 5 per cent which requires an RBI nod.

Analysts say that the confirmed capital raising is only to the tune of $180 million which could move up to $300 million once the name of the $120 million investor is known.

The weak quality of the two large investors likely to bring in $1.7 billion raised challenges for the capital raising at Yes Bank.

The bank requires $2-2.5 billion of capital to provide for bad loans. Analysts say that with low probability of RBI approving the two largest bids totaling to $1.7 billion, capital shortage is now a serious risk for Yes Bank. The next board meeting is on December 10.

The remaining $300 million of bids are from well regarded investors like AV Birla, Discovery, Rakesh Jhunjhunwala, Ward Ferry. Out of this $300 million, the bank has not named the largest investor who will get $120 million but has named the others. The largest investor in this $300 million pool is a US-based fund but will be named next week.

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