JC Flowers ARC invites counterbids for Rs 1,351 crore of bad debts

JC Flowers Asset Reconstruction (ARC), acting in its capacity as the trustee of JCF YES Trust, has invited counterbids, on a full cash basis, from entities interested in acquiring bad debt of five companies totaling Rs 1,351 crore through a Swiss challenge auction.

The five companies are Pan India Network Infravest (Rs 726.5 crore), Taleem Research Foundation (Rs 379 crore), Mount Litera Education Foundation (Rs 113.53 crore), Zee Learn Education Society (Rs 98.22 crore), and Gyanmala Public Education Trust (Rs 33.09 crore), according to an auction notice. JC Flowers has set a reserve price of Rs 505 crore, based on an anchor bid they have received from an ARC.

The proposed transaction will be conducted in a lot and no bids for individual financial assets will be entertained.

Entities interested in bidding for the assets are required to submit expressions of interest (EoIs) by October 16, after which they will have until October 31 to conduct due diligence. Counter bids, if any, have to be submitted by November 6, at which point the highest bidder will be declared. In the event of counter bids, the anchor bidder will have the option to match the highest bid; if they do, they will be declared the successful bidder; otherwise, the highest counter bid will be declared the successful bidder.

In December 2022, JC Flowers ARC – backed by J.C. Flowers & Co. LLC – purchased a pool of non-performing assets, with a principal balance of Rs 48,000 crore (approximately $6 billion) from Yes Bank.  The portfolio was purchased at a consideration of Rs 11,200 crore, wherein the ARC purchased a 15 per cent vertical slice of the NPAs, while Yes Bank retained the rest in the form of security receipts. Post-acquisition, the ARC is acting as the manager for the portfolio workout to optimise recoveries. The portfolio consists of nonperforming and underperforming large corporate loans with significant real estate and infrastructure assets.