HDFC will acquire 100 crore equity shares of Yes Bank at Rs 10 each.
The board of directors of Housing Development Finance Corporation (HDFC) on Friday (13 March 2020) approved entering into an equity commitment letter agreement in relation to investment in Yes Bank.
HDFC is acquiring 100 crore equity shares of Yes Bank for Rs 10 per share for an aggregate consideration of Rs 1,000 crore. The investment is likely to result in HDFC holding in excess of 5% shareholding in Yes Bank, with the final shareholding to be determined based on the final Scheme of Reconstruction and share issuance there under. As per the Scheme of Reconstruction, 75% of the total investment by HDFC would be locked in for 3 years. The investment would be completed by 31 March 2020.
The Union Cabinet on Friday, 13 March 2020, approved the reconstruction scheme for Yes Bank. The bank board will take over after the 7 days once the moratorium is lifted through the notifications. Last week, the Reserve Bank of India (RBI) had announced a draft scheme of reconstruction for Yes Bank.
Earlier, RBI superseded the board of Yes Bank and imposed a month-long moratorium. RBI also capped Yes Bank depositor's withdrawals at Rs 50,000 per account for a month. It also appointed former chief financial officer (CFO) of SBI, Prashant Kumar as the administrator of Yes Bank.
Shares of HDFC rose 10.33% to Rs 2068.50 and Yes Bank rose 2% to Rs 25.55 on Friday, 13 March 2020.
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