Proceeds to help prepay NCD outstanding with RNAM
MUMBAI: Morgan Credits Pvt Ltd (MCPL), part of the promoter group of YES Bank Ltd, has on Thursday sold 2.3 per cent shareholding in the bank.
MCPL said the proceeds will be solely utilized to prepay substantial portion of its outstanding Non-Convertible Debentures (NCDs) subscribed by various schemes of Reliance Nippon Life Asset Management Company (RNAM). MCPL had in April 2018 placed rated, zero coupon NCDs amounting Rs1160 crore with RNAM (the only borrowing of MCPL).
These funds were utilized by MCPL towards incubation of new-age start-up businesses. An MCPL statement said that pursuant to the said sale of shares, the Promoter Group has achieved highly positive outcomes.
It has helped in making total prepayments (including interest) to NCD holders of Rs722 crore till date, well ahead of the scheduled maturity date of April 2021.
It has also resulted in the reduction in total Promoter / Promoter Group ownership in YBL to 15.7 per cent (in further compliance with RBI’s regulatory level of 15 per cent).
Radha K Khanna, Director, MCPL said “We have concluded the stake sale solely to de-leverage MCPL. Through the prepayment of NCDs to RNAM, we have significantly reduced our borrowing in MCPL in an accelerated manner. Sponsored by women entrepreneurs, MCPL will continue to focus on its existing start-up ventures fully supported by professional management teams that have come on board as co-founders / partners”.
Rana Kapoor, Promoter, YBL said that with the sole intention of reducing debt of the Promoter holding company – MCPL, owned by his three daughters, it was decided to bring down the family ownership in YES Bank to 7.4 per cent.
“YES Bank is a terrific home grown, large Indian banking institution, which has an outstanding leadership team, proven asset quality and resolution / recovery management skills, diversified income streams and an efficient cost structure ensuring sustainability in earnings. YES Bank is well poised in its growth journey to tackle challenges and seize opportunities in future as amply demonstrated over the past 15 years since its commencement in 2004.”