Yes Bank to sell its ₹48,000-crore bad loans to JC Flowers ARC

Sep 20, 2022, 09:00 pm

Yes Bank's board has approved the transfer of stressed assets worth ₹48,000 crore to private equity firm JC Flowers. YES Bank will also pick up a 19.99% stake in the ARC, subject to regulatory approvals, the lender said in a BSE filing.


The Yes Bank board has approved JC Flowers as the winner of the Swiss Challenge process. The decision follows a Swiss Challenge auction where the bank didn't receive any competing bids against base bidder JC Flowers ARC.


“The Swiss Challenge process has now concluded and the Bank not having received any Challenger Bids to the Base Bidd, the Board of Directors of the Bank, at their Meeting held on September 20, 2022, has approved the declaration of JC Flowers ARC as the winner of the Swiss Challenge process," Yes Bank said in a statement.


“Further, pursuant to the binding term sheet signed by the Bank with JCF ARC LLC and JC Flowers ARC for strategic partnership in relation to sale of the Identified Portfolio of the Bank, the Board of Directors of the Bank, at their Meeting held on September 20, 2022, has also approved the necessary investment for acquisition of up to 19.99% equity stake in JC Flowers ARC by the Bank (in single or multiple tranches), subject to required regulatory approvals," the statement read.


JC Flowers ARC won Yes Bank's non-performing loan portfolio for ₹11,183 crore in a Swiss Challenge auction, after a consortium of Cerberus Capital and Asset Reconstruction Company of India (ARCIL) withdrew its bid.


The ARC will have to pay ₹1,677 crore within 60 days of Yes Bank formally approving the offer. It had paid an earnest money deposit of $50 million at the time of submitting the bid.


"Once the board approves the JC Flowers bid, it will take about a month for the paperwork to be completed and the assets to be transferred," a source said.


As of June end, Yes Bank’s gross NPAs were 13.4%, compared to 15.6% during the corresponding period of last year. Gross NPAs were ₹27,747 crore at the end of June 2022 compared to ₹28,506 crore at the end of June 2021.