New Delhi, Sept 7: Private sector lender RBL Bank on Monday approved a plan to raise up to USD 1 billion from overseas investors through the issuance of foreign currency bonds, notes and other eligible debt securities.
The fundraising will be undertaken through a newly approved Euro Medium Term Note (EMTN) Programme, subject to regulatory, statutory and other necessary approvals.
The bank said its board approved the establishment of the EMTN Programme in accordance with Regulation S of the US Securities Act, 1933.
The programme will allow RBL Bank to access overseas debt markets through one or more transactions, with the timing and size of individual issuances depending on market conditions and regulatory requirements.
Under the approved framework, RBL Bank can issue foreign currency bonds, notes or other debt securities of up to USD 1 billion from time to time. The bank will raise funds through permissible modes under the EMTN Programme, with each issuance subject to applicable regulations and prevailing market conditions.
The board has also delegated certain powers and authorities to the bank’s Borrowing Committee. The committee will take necessary decisions and undertake actions related to the EMTN Programme and the issuance of securities under the framework.
The fundraising plan comes after Emirates NBD completed its acquisition of a majority stake in RBL Bank in June. The UAE-based lender invested approximately USD 2.75 billion, or around Rs 26,000 crore, through a preferential issue of shares, giving it a 60 per cent stake in the expanded share capital of the Indian bank.
The transaction was accompanied by a mandatory open offer to RBL Bank’s public shareholders in accordance with applicable regulations. Following completion of the transaction, Emirates NBD became the majority shareholder of RBL Bank.
The Emirates NBD transaction was described as the largest foreign direct investment in India’s banking sector and the largest equity fundraise in the sector. It was also among the largest fundraises through a preferential issue by a listed company in India and marked the first acquisition of a majority interest in a profitable Indian bank by a foreign lender.
The new EMTN Programme gives RBL Bank an additional channel to access international debt markets following the change in its ownership structure. The bank has not disclosed the timing of the first issuance or how much of the USD 1 billion programme it intends to utilise initially.
