Yes Bank ARC bid process enters final round as deadline ends Friday

The process to find investors for setting up an asset reconstruction company by Yes Bank enters the last stage with the deadline for submitting bids ending on Friday.

The private sector lender is planning to set up an asset reconstruction company to transfer its entire stressed pool of loans of Rs 50,000 crore so that its nonperforming assets become zero.

Among the investors submitted bids, three to four private equity players are expected to make it to the shortlist. These are JC Flowers and Company, Oaktree Capital, Cerberus Capital, and Apollo Global Management.

In the post earnings call with the investors, Yes Bank’s MD & CEO Prashant Kumar had said that the bank plans to complete the transaction of transferring stressed assets to the ARC by the end of the current financial year.

“We are trying to say do it by March end but because of the Covid uncertainties and regulatory approvals, it may slip to the next quarter i.e. the first quarter of the next financial year. But we are trying to conclude it by March end,” Mr Kumar said.

“We are actually in the process of setting up an ARC and we would like to shift our entire NPL portfolio to ARC. So, we would be expecting that once this transition is over, we would be having almost like zero NPL kind of thing,” Kumar added.

The bank has a stressed pool of Rs 50,000 crore, including technical write-offs.

While inviting Expression of Interest, the banks said the prospective investor should have minimum assets under management and funds deployed globally to the tune of $5 billion in the immediately preceding financial year. Also, the investor should have the ability to commit funds for investment or deployment in Indian companies or Indian assets or approximately $0.5 billion. EY is the process advisor for the deal. The bank will hold a 20 per cent stake in the ARC.