Yes Bank selects JC Flowers ARC as its joint venture partner

According to a stock market filing on Friday, private lender NSE -0.75 percent and JC Flowers Asset Reconstruction (ARC) have signed a term sheet for the sale of identified stressed bank loans totaling up to Rs 48,000 crore.

A binding term document for a strategic partnership for the sale of the bank’s identified stressed loans has been signed by the bank and JCF ARC LLC and JC Flowers Assets Reconstruction Private Limited (“JC Flowers ARC”). This was accomplished in line with the Board of Directors’ enabling decision from May 6, 2022, and the Board Credit Committee’s final approval from July 13, 2022.

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

“The bank has decided that the beginning bidder for a planned sale of a specific portfolio of stressed loans with a value of up to Rs. 48,000 Crores would be the JC Flowers ARC. In accordance with the Reserve Bank of India’s regulations, the Bank intends to sell such a portfolio through a transparent bidding process on a Swiss Challenge basis, using the proposal from JC Flowers ARC as the base bid “In a statement, it was said.

Soon after the Reserve Bank of India rejected Yes Bank’s intention to establish an ARC as a subsidiary in March 2021, Yes Bank issued an invitation for bids for its portfolio of troubled loans, totaling Rs 51,000 crore. According to reports, if the deal goes through, it would be India’s largest sale of troubled assets, putting Yes Bank almost entirely free of non-performing assets (NPAs), which will make it simpler for the bank to acquire capital.

Yes Bank, established by Rana Kapoor and saved by the NSE -0.11 percent two years ago, had been trying for over a year to raise Rs 10,000 crore in equity but had been unable to do so because of the sizeable amount of NPAs on its books.