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Journalism of Courage
Federal Bank on Saturday said it has committed to investing Rs 300 crore in beleaguered Yes Bank for subscription of its 30 crore shares.
“The Bank has issued an Equity commitment Letter to invest Rs 300 crore in YES Bank Ltd for subscription of 30 crore equity shares of Yes Bank at a price of Rs 10 per Equity share,” a regulatory filing said.
According to the statement this equity commitment is pursuant to the scheme of reconstruction of Yes Bank proposed by the Reserve Bank of lndia and subject to regulatory approvals and other conditions as set out in the Letter.
The Union Cabinet on Friday approved a reconstruction plan proposed by the RBI for bailing out fund-starved Yes Bank.
The authorised capital of Yes Bank has been increased to Rs 6,200 crore, Union minister Nirmala Sitharaman said on Friday.
Under the plan, state-run SBI will infuse Rs 7,250 crore in the crisis-ridden private bank and take 49 per cent equity.
Private lender ICICI Bank also announced investing Rs 1,000 crore for an equity in excess of 5 per cent. HDFC will infuse Rs 1,000 crore, while Axis Bank will invest up to Rs 600 crore to purchase 60 crore shares in the bank.
There will be a three year lock-in period for all the investors. However, the lock-in period for SBI would be only for 26 per cent of shareholding. It would be 75 per cent in case of other investors.
The government has notified the Yes Bank reconstruction scheme as per which the moratorium on the troubled private sector lender will be lifted on March 18.
