ARCS
Yes Bank gets JC Flowers ARC to unload Rs 48,000 cr of bad loans
Yes Bank signs term sheet with JCF ARC LLC and JC Flowers Asset Reconstruction for strategic partnership to sell stressed loans aggregating to Rs 48,000 crore.
Yes Bank signs term sheet with JCF ARC LLC and JC Flowers Asset Reconstruction for strategic partnership to sell stressed loans aggregating to Rs 48,000 crore.
Yes Bank on Friday said it has signed a term sheet with JCF ARC LLC and JC Flowers Asset Reconstruction for strategic partnership to sell stressed loans of the bank aggregating to Rs 48,000 crore.
JC Flowers ARC will be base bidder for the proposed sale of the bank’s identified stressed loan portfolio.
The final approval for the term sheet came from the Board Credit Committee on July13, 2022.
“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," Yes Bank said in a regulatory filing to the stock exchanges.
The term sheet has become effective as on July 15, 2022.
Yes Bank will run a transparent bidding process on Swiss Challenge basis using JC Flowers ARC’s bid as the base bid.
"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," Yes Bank said.
After the Reserve Bank of India (RBI) in March 2021 rejected Yes Bank’s proposal to set up an ARC as its subsidiary, the bank invited bids for its distressed loans portfolio
On completion of the transaction, Yes Bank will become the first bank in India to have no non-performing assets (NPAs). This will allow the bank, which was bailed out by the State Bank of India two years back, to raise capital and scale up its lending activities.
As on 31 March 2022, Yes Bank’s gross NPA stood at Rs 36,479 crore, which accounted for 13.9% of its advances. The lender’s gross restructured loans stood at Rs 6,752 crore while loans overdue between 61 and 90 days stood at Rs 1,264 crore.
