Yes Bank selects JC Flowers ARC as its joint venture partner to sell impaired debts totaling Rs48,000 crore

15 Jul 2022 , 11:11 AM

According to a stock exchange statement on Friday, private lender Yes Bank has inked a term sheet with JC Flowers Asset Reconstruction (ARC) for the sale of identified stressed loans of up to Rs48,000 crore.

According to the statement, “the bank has signed a binding term sheet with JCF ARC LLC and JC Flowers Asset Reconstruction Private Limited (“JC Flowers ARC”) for strategic partnership in relation to the sale of identified stressed loans of the bank. This was done in accordance with the enabling approval of the Board of Directors on May 6, 2022, and the final approval from the Board Credit Committee on July 13, 2022.

It said that the aforementioned term sheet would now take effect on July 15, 2022.

“The bank has determined that the JC Flowers ARC will serve as the starting bidder for a proposed sale of a specified portfolio of stressed loans totaling up to Rs48,000 Crores. The Bank proposes to conduct a transparent bidding procedure on a Swiss Challenge basis for the sale of such a portfolio using the JC Flowers ARC’s bid as the base bid in compliance with the rules established by the Reserve Bank of India “it stated in a statement.

Soon after the Reserve Bank of India rejected Yes Bank’s plan to establish an ARC as a subsidiary in March 2021, Yes Bank issued an invitation for bids for its portfolio of troubled loans, totaling Rs51,000 crore. According to reports, if the deal goes through, it will be India’s largest sale of troubled assets and Yes Bank will have almost no non-performing assets (NPAs), which will make it simpler for the bank to borrow capital.

Yes Bank, founded by Rana Kapoor and saved by the State Bank of India two years ago, had been trying for over a year to raise Rs10,000 crore in equity but had been unable due to the sizeable amount of NPAs on its books.