Yes Bank has selected JC Flowers ARC as a partner to form an asset reconstruction company to deal with bad loans.

Yes, Bank said its committee has approved the transfer of stressed assets worth 48,000 crores to JC Flowers Asset Reconstruction after earning no bids to challenge what was made by the private equity company. While JC Flowers submitted a preliminary bid of 11,183 crores for the NPA, it’s said to be the largest sale of stressed assets in domestic markets.

Accordingly, the bank has decided that JC Flowers ARC will be a base bidder for a proposed sale of an identified stressed loan portfolio of the bank aggregating to up to ₹48,000 crores,” it said.

As per Reserve Bank of India guidelines, Yes Bank said it formulated to run a transparent bidding procedure on a Swiss Challenge basis for the sale of such a portfolio using JC Flowers ARC’s bid as the base bid.

Further, under the binding term sheet signed by the Bank with JCF ARC LLC and JC Flowers ARC for strategic partnership about the 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 the acquisition of up to 19.99% equity stake in JC Flowers ARC by the Bank subject to required regulatory 

approvals,” the statement read.

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%, distinguished to 15.6% during the complementary period of last year. Gross NPAs were ₹27,747 crores at the end of June 2022 approximated to ₹28,506 crores at the end of June 2021.