Morgan Credits sells 2.3 per cent in Yes Bank to pay back Reliance Nippon

Morgan Credits (MCPL), part of the promoter group of YES Bank, on Thursday sold a 2.3% shareholding in the bank. The proceeds will solely be utilised to prepay a substantial part of outstanding NCDs of MCPL subscribed by various schemes of Reliance Nippon Life Asset Management Company (RNAM).

The company said in a press release, “MCPL had in April 2018 placed rated, zero coupon NCDs amounting Rs 1,160 crore with RNAM (the only borrowing of MCPL). 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 total prepayments (including interest) to NCD holders of Rs 722 crore till date, well ahead of the scheduled maturity date of April 2021 and reduction in total promoter/promoter group ownership in YBL to 15.7% (in further compliance with RBI’s regulatory level of 15.0%), as compared to 18.0% previously.

Radha K Khanna, director of 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 who have come on board as co-founders/partners.”

CARE Ratings had on Tuesday downgraded non-convertible debentures of MCPL to ‘BBB-‘ from ‘A-‘. Data from Value Research show that debt mutual funds of Reliance Mutual Fund holds Rs 913.47 crore in the debt papers issued by MPCL.

Rana Kapoor, promoter of Yes Bank, said, “With the sole intention of reducing debt of the promoter holding company – MCPL, owned by my three daughters, it was decided to bring down our family ownership in Yes Bank to 7.4%.”

Yes Bank