India’s Yes Bank has ‘strong’ grounds to appeal ATI bonds court order, CEO says

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“The judgment in itself is not questioning the regulatory guidelines in terms of cancellation (AT1 bonds). I think there are questions in terms of the process,” Kumar told reporters after the publication of the results of ‘ quarterly of the lender.

“We have legal advice and strong opinions that interpret the matter differently and that makes a solid basis to appeal to the Supreme Court.”

The Bombay High Court invalidated the cancellation of additional AT1 bonds issued by the private lender on Friday. The bonds were canceled as part of a restructuring plan to save Yes Bank in March 2020.

The court did not go into the merits of the bonds and decided that there was a procedural lapse in the decision to set them down.

Iva Bank said in the Stock Exchange filed late on Friday that it is in the process of preparing an appeal to the Supreme Court.

Kumar said on Saturday that the bank had requested six weeks from the tribunal to appeal in the higher court. He said that there will be no immediate impact of the order on the banks’ books.

Since the bank already has strong legal opinions in its favour, there is no need to make any contingent provisions for the written off bonds, Kumar added.

In addition, Yes Bank will have the discretion regarding the payment of the interest of the AT1 bonds, he said, adding that any comment in this regard will be made after the decision of the Supreme Court.

The write-off also will not impact Carlyle Group and Advent’s equity infusion into the bank, he added.

In December, private equity majors Carlyle Group and Advent each bought a 10% stake in the bank.

(Reporting by Siddhi Nayak and Nupur Anand; Editing by Mike Harrison)

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