Reaffirming that the sale of assets to JC Flowers Asset Reconstruction Company (ARC) is on track, Prashant Kumar, MD & CEO, YES Bank, said the deal should conclude soon. “The transaction with JC Flowers ARC is expected to conclude in the next 10-15 days,” he stated in an exclusive conversation with businessline.
YES Bank had identified ₹ 48,000 crore of stressed assets to sell down from its books and these assets have been picked up by JC Flowers ARC for ₹11,183 crore. With sale to ARC following the 15:85 rule, where 15 per cent of the consideration is paid upfront in cash and the remaining as security receipts, the bank expects ₹1,677.45 crore to reflect in its upcoming December quarter financials.
Raising stake
“Once the transfer of assets happens and the cash is received, YES Bank will apply to the RBI seeking permission to increase its stake in JC Flowers ARC to 20 per cent,” said Kumar. At present, the bank has invested ₹14.14 crore as equity in the ARC for a stake of 9.99 per cent. The proposed equity structure for the ARC is that JC Flowers and its associates would invest up to 80 per cent equity, while the remaining would come from YES Bank.
In July 2022, YES Bank entered into a partnership with JCF ARC LLC and JC Flowers ARC Private Limited for sale of identified stresses loans of the bank. In September, the bank announced that JC Flowers ARC emerged the base bidder for sale of an identified stressed loan portfolio of the bank totalling to ₹48,000 crore. With no challenger bids received for these assets, the bank went ahead with the US-headquartered ARC for the sale. Post the completion of sale of assets to the ARC, YES Bank’s gross NPA is expected to improve to two per cent as against 12.89 per cent in September FY23 quarter.