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Yes Bank sells bad loan assets

Private sector lender earlier declared JC Flowers ARC as winner of Swiss challenge process for sale of its identified portfolio of stressed assets
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Our Special Correspondent   |   Mumbai   |   Published 20.12.22, 02:02 AM

Yes Bank on Monday said it has completed the assignment of its non-performing assets (NPAs) worth Rs 48,000 crore to J.C. Flowers Asset Reconstruction Pvt Ltd (JC Flowers ARC).

The private sector lender had earlier declared JC Flowers ARC as the winner of the Swiss challenge process for the sale of its identified portfolio of stressed assets.


As part of the competitive process conducted by the bank, JC Flowers ARC submitted a binding bid of Rs 11,183 crore, under a 15:85 structure — 15 per cent cash and 85 per cent security receipts — for the assignment of the pool of the identified stressed assets of Yes Bank.

Following this, the board of Yes Bank, at a meeting held on September 20, 2022, approved the declaration of JC Flowers ARC as the winner of the Swiss challenge process. The lender had appointed Ernst & Young (EY) as its exclusive transaction and process advisor, and Cyril Amarchand Mangaldas as its legal advisor to assist through this process.

This is the single largest transaction of the sale of bad loans in the Indian banking system.

“The transfer of the bank’s stressed assets marks the single largest non-performing asset sale ever in the India banking system. Coupled with the recent capital raise, this is yet another strategic milestone in the turnaround journey of Yes Bank,” Prashant Kumar, MD and CEO of Yes Bank, said.

“This transaction would further strengthen our balance sheet, allowing the bank to focus fully on growth and profitability as future strategic objectives,’’ Kumar said.

Recently, Yes Bank concluded a major private capital raise transaction. The bank approved the allotment of equity shares and equity share warrants aggregating Rs 8,887 crore ($ 1.1 billion) through a preferential issue to the funds affiliated with two private equity investors — Carlyle and Advent International.

Both investors now own 9.99 per cent each of the bank.

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