Following the proposed sale of YES Bank’s bad debt to JC Flowers Asset Reconstruction Company, the private lender’s plan to bring in Carlyle and Advent for a potential $1 billion investment has now accelerated, according to a report by The Economic Times reports Friday.
Senior executives from Hong Kong’s Carlyle Group and executives from Advent International, in a series of meetings with Yes Bank and its largest shareholder, the senior management of State Bank of India (SBI), and officials from the Reserve Bank of India this week decided on the outlines of the investment plan which will be undertaken in phases, people familiar with the matter have said. HEY.
Carlyle and Advent’s proposed investment in YES Bank could be similar to Bain Capital’s investment in Axis Bank. The Boston-based private equity firm had led a consortium to invest $1.8 billion in the bank.
According to the report, YES Bank is expected to issue nearly 2.6 billion warrants to Carlyle and Advent and award PE funds new shares as part of the deal.
Read also: YES Bank plans to invest Rs 350 cr in JC Flowers and raise $1 billion in FY23
The two companies will cumulatively invest Rs 3,600-3,900 crore, at Rs 14-15 per share in the private lender and own 5% each of the expanded capital base, the HEY reported.
The report states that the warrants issued by YES Bank will be converted into shares in the future based on a pre-agreed exercise price and timetable, which is typically 18 months, depending on the report.
“Management believes the stock is undervalued, but for investors the current stock price or a 52-week average price is the best benchmark,” said one of the people with knowledge of the incident. ‘affair. HEY.
To keep SBI’s stake at 26% under the regulator-approved stimulus package, the private lender can issue a maximum of 3.8 billion warrants.
SBI currently holds a 30% stake in YES Bank.
The transaction is expected to occur once Yes Bank’s deal with JC Flowers is completed and shareholder approval for new board members is finalized, which is expected by September, the HEY indicated report.