• The Bank is confident that JC Flowers ARC will be able to unlock the true potential value of the properties being handed over under the sale transaction.
Yes Bank on Monday announced the completion of assignment of its stressed assets loan portfolio of ₹48,000 crore to JC Flowers Asset Reconstruction (JC Flowers ARC). This is the largest ever transaction of sale of non-performing assets in the country's banking system. With this transaction, Yes Bank is expected to benefit from realization higher than the current yield.
Yes Bank said in a statement that the assignment of outstanding non-performing assets (adjusted for recoveries since then) totaling ₹48,000 crore to JC Flowers ARC as of March 31, 2022, has been completed Is.
It added that the bank is confident that JC Flowers ARC will be able to unlock the true potential value of the properties being handed over under the sale transaction.
Prashant Kumar, Managing Director and CEO, Yes Bank said, “The transfer of stressed assets of the bank is the largest ever non-performing asset sale in the Indian banking system. Coupled with the recent capital raising, this The turnaround is another strategic milestone in the journey."
"This transaction will further strengthen our balance sheet, allowing the bank to fully focus on growth and profitability as future strategic objectives," Kumar said.
The Yes Bank MD also believes that the JC Flowers ARC platform will serve as a model and allow other Indian financial institutions to tap and monetize the considerable interest of global investors in the troubled credit markets.
According to the statement, as part of a competitive process conducted by the bank, JC Flowers ARC had submitted a binding bid of ₹11,183 crore for the assignment of the pool under a 15:85 structure (15% cash and 85% security receipt) . of identified stressed assets of the bank, for the position as on March 31, 2022.
Subsequently, with the objective of value maximisation, Yes Bank conducted a transparent bidding process based on the Swiss Challenge Methodology under RBI's Master Direction on Transfer of Credit Risks. The process was designated as 'Base Bidding' with the bids submitted by JC Flowers.
Subsequently, in a meeting held on September 20, the Board of Yes Bank approved the declaration of JC Flowers ARC as the winner of the Swiss challenge process.
Notably, Ernst & Young (EY) was appointed by Yes Bank as its exclusive transaction and process advisor, and Cyril Amarchand Mangaldas was appointed as legal advisor for the process.
Recently, Yes Bank completed the second largest private capital raising transaction in the banking sector in the last two decades. Under this transaction, Yes Bank allotted equity shares and equity share warrants on a preferential basis to two global marquee private equity investors - Carlyle and Advent International, for a consideration of ₹8,887 crore. Subsequently, Carlyle and Advent now own 9.99% each of the post-issue paid-up share capital of the bank.
These two transactions are expected to provide the necessary impetus to Yes Bank to further accelerate its objective of growth and profitability.
On Monday, shares of Yes Bank closed at ₹21.40, up 0.94% on the BSE. Its market cap was around ₹27,347 crore.
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