Morgan Credits, a promoter group firm of Yes Bank, on Thursday said it has sold 2.3 per cent shareholding in the private sector lender.
According to Business Standard, this was to prepay a certain part of its outstanding dues to Reliance Nippon Life AMC (RNam). The share sale aggravated the selling pressure on YES Bank, as a result of which its share price closed 15.5 per cent lower. "The proceeds will be solely utilized to prepay substantial portion of outstanding Non-Convertible Debentures (NCDs) of MCPL subscribed by various schemes of Reliance Nippon Life Asset Management Company (RNAM)," the company said in a regulatory filing.
Radha Kapoor-Khanna, director of MCPL and Kapoor’s daughter, told the Bussiness Standard, “We have concluded the stake sale solely to de-leverage MCPL. Through the prepayment of NCDs of RNam, we have significantly reduced our borrowing in MCPL in an accelerated manner.”
Morgan Credits in April 2018 had placed rated, zero coupon NCDs amounting Rs 1,160 crore with RNAM (the only borrowing of MCPL), it said. These funds were utilised by MCPL towards incubation of new-age start-up businesses. Pursuant to the above sale of shares, which was conducted solely to de-leverage MCPL, the promoter group has achieved highly positive outcomes, it added.
There were total pre-payments (including interest) to NCD holders of Rs 722 crore till date, well ahead of the scheduled maturity date of April 2021 as well as reduction in total promoter/promoter group ownership in Yes Bank to 15.7 per cent in compliance with the RBI norm of 15 per cent, as compared to 18 per cent earlier.