Yes Bank announced on September 20 that its board has approved the sale of $6 billion stressed debt to private equity firm JC Flowers after the bank received no challenger bids to JC Flowers' base bid for the Rs 48,000 crore NPA portfolio.
Notably, JC Flowers had submitted an initial bid of Rs 111.83 billion for the NPA.
After the Swiss Challenge process (done to invite challenger bids for the sale of stressed assets) concluded, the bank’s board approved the declaration of JC Flowers ARC as the winner of the Swiss Challenge process today.
Yes Bank said in a stock exchange filing: “The Swiss Challenge process has now concluded and the Bank not having received any Challenger Bids to the Base Bid, the Board of Directors of the Bank, at their Meeting held on September 20, 2022, has approved the declaration of JC Flowers ARC as the winner of the Swiss Challenge process.”
Further, the Board of Directors of the bank at their meeting held on September 20 also approved the necessary investment for the acquisition of up to 19.99 percent equity stake in JC Flowers ARC by the Bank (in single or multiple tranches), subject to required regulatory approvals.
After Yes Bank had signed a binding term sheet with JCF ARC LLC and JC Flowers Asset Reconstruction Pvt Ltd (JF Flowers ARC) for strategic partnership in relation to the sale of identified stressed loans of the bank on July 15, 2022, the private sector lender’s managing director and chief executive Prashant Kumar had said he feels the transfer of gross non-performing assets to the asset reconstruction company “will take care of the biggest challenge faced by the bank as it will reduce the NPAs to under two percent from the present 14 percent”.Yes Bank had invited bids for its bad assets portfolio soon after the Reserve Bank of India in March 2021 rejected its plan to set up an ARC as its subsidiary.