Yes Bank to Erwin Singh Braich: Don’t go away with your $1.2 billion moneybag, yet

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Updated: December 10, 2019 5:09:40 PM

Yes Bank today rushed in to do some damage control after media reports said that Canadian investor Erwin Singh Braich's $1.2 billion investment offer may be rejected.

yes bank says eight investors ready to invest 2 billion dollar in bankThe board of Yes Bank said on Tuesday that the “binding offer of $1.2 billion submitted by Erwin Singh Braich / SPGP Holdings continues to be under discussion.”

Yes Bank today rushed in to do some damage control after media reports said that Canadian investor Erwin Singh Braich’s $1.2 billion investment offer may be rejected, and another one which said that billionaire Rakesh Jhunjhunwala too was having second thoughts on his offer of $25 million. The board of Yes Bank said on Tuesday that the “binding offer of $1.2 billion submitted by Erwin Singh Braich / SPGP Holdings continues to be under discussion.” Not only this, the bank is smiling on another offer of $500 million investment by Citax Holdings and Investment Group. “The Board is willing to favourably consider the offer of US$500 Million of Citax Holdings and Citax Investment Group and the final decision regarding allotment to follow in the next board meeting, subject to requisite regulatory approval(s,” Yes Bank said in a statement to the exchanges.

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Notably, Yes Bank said that it shall continue to evaluate other potential investors to raise capital upto US$ 2 billion. Shares of private sector lender Yes Bank plunged on Tuesday afternoon, after media reports said that ace investor Rakesh Jhunjhunwala may withdraw his $25 million bid. Yes Bank share price closed 10% lower at Rs 50.55 on BSE. Rakesh Jhunjhunwala may withdraw his $25 million bid in Yes Bank after uncertainty over the bank’s capital raising plans, BusinessLine had reported citing sources. Notably, Bloomberg had reported Yes Bank is likely to reject $1.2 billion bid by Canadian investor Ervin Singh Braich and SPGP, opting instead for institutional investors.

 Last week, Yes Bank had announced plans to raise up to $2 billion from domestic and global investors. Erwin Singh Braich had expressed interest to invest up to $1.2 billion in the bank. Family office of Citax Holdings Ltd & Citax Investment Group were looking to put in $500 million in the bank. Aditya Birla Family Office and GMR Group and Associates had also expressed their interest to invest $50 million each.  A Top Tier US Fund House– Capital International has also shown interest to invest around $120 million in the lender. Discovery Capital ($ 50 million), and Ward Ferry ($30 million) were also among interested investors. Apart from these, ace investor Rakesh Jhunjhunwala’s wife Rekha Jhunjhunwala’s has also expressed interest to invest up to $25 million in the bank.

 Following the development, global brokerages had raised concerns over the quality of investors in Yes Bank. “We have big reservations regarding the quality of investors that have bid and we doubt whether RBI will give approval to such investors who want to take more than 10% stake”, global brokerage firm Macquarie said in a report on December 3. “To be honest we hadn’t even heard of SPGP Holdings/Erwin Singh Braich and Citax investments. These companies don’t even have an official website per se, nor does the billionaire Erwin Singh Braich have a Wikipedia link to describe him”, Macquarie added in its report.  Global brokerage firm Jefferies has also retained its under perform rating with target price of Rs 38 per share. Jefferies noted that out of the total of $1.8 billion coming from family-offices, $1.7 billion is from two lesser known off-shore investors and both don’t seem to have very positive reputations going by a quick internet news search.

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