India Finance News

Yes Bank picks JC Flowers ARC as JV partner to offload distressed loans worth Rs 48,000 cr – Economic Times

Private lender has signed a term sheet with JC Flowers Asset Reconstruction (ARC) for the sale of identified stressed loans of the bank aggregating to up to Rs 48,000 crore, it said in a stock exchange filing on Friday.

“Pursuant to the enabling approval of the Board of Directors on May 06, 2022 and the final approval from the Board Credit Committee on July 13, 2022, 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,” it said.

The said term sheet has now become effective as on July 15, 2022, it said.

“The bank has decided that the JC Flowers ARC will be base bidder for a proposed sale of an identified stressed loan portfolio of the Bank aggregating to up to Rs. 48,000 Crores. In accordance with the guidelines issued by the Reserve Bank of India, the Bank proposes to run a transparent bidding process on Swiss Challenge basis for sale of such portfolio using the JC Flowers ARC’s bid as the base bid,” it said in a release.

Yes Bank had invited bids for its distressed loans portfolio, amounting to Rs 51,000 crore, soon after the Reserve Bank of India in March 2021 rejected its plan to set up an ARC as its subsidiary. The potential completion of the transaction was reported to be India’s largest sale of distressed assets which will result in Yes Bank becoming nearly a zero non-performing asset (NPA) bank, making it easier for the bank to raise capital.

Rana Kapoor founded Yes Bank, which was bailed out by the

two years ago, was seeking to raise Rs 10,000 crore equity for over a year but was unable to strike a deal due to the huge quantum of NPAs in its books.

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