YES Bank acquires 8 crore pledged shares of CG Power
PTI May 7, 2019
Private sector lender YES Bank on Tuesday said it has acquired eight crore shares in electric equipment maker CG Power and Industrial Solutions which were pledged to it by a borrower.
The acquired shares represent 12.79 per cent ownership in the company and will be valued at Rs 292.56 crore as per the Tuesday's close.
The shares have been acquired on "invocation of pledge subsequent to default/breach of terms of loan to Oyster Buildwell Private Limited", the bank said in a regulatory filing.
Proceeds from the sale of shares will be utilised to reduce the loans secured by such shares, it added.
CG Power had a turnover of Rs 6,287 crore in the fiscal year 2017-18.
A report by domestic brokerage Kotak Institutional Equities had Tuesday said that 100 per cent of the promoter shareholding in CG Power was pledged as of March 31.
It can be noted that the private sector lender has come under pressure from investors after it declared a maiden loss of Rs 1,506 crore for the March quarter under new leadership.
YES Bank new chief executive Ravneet Gill had disclosed that over Rs 10,000 crore of loans is to low-rated borrowers and it expects half of it to slip into NPAs, due to which it made a proactive contingent provision of Rs 2,100 crore.
Apart from a "double downgrade" by a foreign brokerage, the bank's long-term rating was also downgraded by domestic rating agency Icra over the weekend.