- Why? Yes Bank wants to raise INR 700 Crore. The aim is to minimise the current exposure in the company Warora-Kurnool Transmission Ltd (WKLT) as they are unable to fund Warora-Kurnool Project.
- The Warora-Kurnool transmission line was the biggest inter-regional transmission project of laying electric lines in central India. Therefore, the lines run from Warora in Maharashtra and Kurnool in Andhra Pradesh.
- Hence, for funding of this transmission project, WKTL had taken out a ‘Term Loan‘ facility for INR 2,790 Crore from Yes Bank.
- Out of INR 2,790 Crore loan facility, INR 1,200 has been given to WKTL. However, there has been continuous default by WKTL in its debt repayment to its lenders. Due to this WKTL is unable to execute the project.
- Such dealings between Yes Bank and SBI comes at a time when Yes Bank is preparing for an INR 15,000 Crore follow-on public offer (FPO). You should expect this by the 2nd week of July.
- FYI: FPO is a sale of stock by a company, or by an existing shareholder of a company that is already publicly held.
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