Yes Bank Likely To Close Stressed Asset Sale To JC Flowers ARC This Month

Yes Bank Ltd. is set to close the sale of Rs 48,000 crore worth of bad loans to JC Flowers Asset Reconstruction Co. Ltd. this month.

Speaking to reporters on the sidelines of FIBAC 2022 Wednesday, Prashant Kumar, managing director and chief executive officer of Yes Bank, said that the sale is in its final stages. “We are awaiting some legal closures. It should happen in November,” Kumar said. It is one of the largest stressed asset sales happening in the Indian banking system.

After a detailed two-stage bidding process, Yes Bank finalised JC Flowers ARC as the winning bidder.

JC Flowers had submitted a bid of Rs 11,183 crore for the entire pool of stressed assets, assuring a recovery of around 23% to the bank, according to the details provided by the private lender.

Once the sale is concluded, Yes Bank is also looking to buy a 19.99% stake in JC Flowers ARC, which will allow the lender to participate in any upside on the recovery of these bad loans. However, a final approval needs to be taken from the Reserve Bank of India.

If the regulatory approvals do not come in, Yes Bank is open to holding 9.99% stake in JC Flowers ARC, the maximum approved investment limit without an RBI nod.

The sale will not only wipe out Yes Bank's legacy stressed-asset problem, but will also pave the way for equity fundraising from the Carlyle Group and Advent International. The private bank will raise $1.1 billion in total from these two investors in exchange for a 10% equity stake in each, it had previously said.