Home / Industry / Banking /  12 entities express interest in Yes  Bank’s ARC  proposal

MUMBAI : Yes Bank Ltd has received expressions of interest from a dozen investors for setting up an asset reconstruction company with the private sector lender as the minority partner, two people aware of the development said.

Some of the private equity firms who have shown interest include Brookfield Asset Management, Ares SSG, Oaktree Capital Management, JC Flower, Varde Partners, CarVal Investors, Avenue Asia Group, Bain Capital’s India Resurgent Fund, Apollo Global Management, Rohatyn Group and Silver Point Capital, the people said on condition of anonymity.

The bank will now shortlist potential investors after discussions with the interested PE firms, one of the two people said, adding that the shortlisted investors will then be asked to submit initial bids.

“The bank will look at the compatibility of the partnership. It hopes to complete the entire exercise by the end of October," the person said.

An email sent to a Yes Bank spokesperson went unanswered at the time of going to press.

Last month, Yes Bank invited expressions of interest to set up the asset reconstruction company (ARC). It has hired EY as the process adviser. The bank had stipulated that an investor should have minimum assets under management and funds deployed globally of at least $5 billion. “The current set of ARCs is neither well-capitalized nor do they have the capability to handle a large pool of bad loans. The bank is not looking to transfer individual assets; instead, it will transfer the entire asset pool," said the second person. “Shifting to the new bad bank is also ruled out as it is yet to be set up."

Yes Bank will follow a transparent bidding process once the new ARC is set up, the person said, adding that it will call for bids for the entire pool of bad assets. This is the second attempt by Yes Bank to set up an ARC. The Reserve Bank of India rejected the first proposal as it wasn’t keen on the bank being the majority shareholder in an ARC because of potential conflicts of interest.

In the June quarter, Yes Bank reported the highest quarterly profit since December 2018 as bad loan provisions fell. Profit jumped more than fourfold to 206.84 crore from a year ago. Its gross non-performing asset ratio stood at 15.6% as of 30 June, compared with 15.41% as of 31 March. It restructured 4,624 crore loans as of 30 June.

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