12 entities express interest in Yes Bank’s ARC proposal
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, Vardhe Capital, Carval Investors, Avenue Asia Group, Bain Capital’s India Resurgent Fund, Apollo Global Management, Rohatyn Group and Silver Point
MUMBAI:
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 invesan tors 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.
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.
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 nonperforming asset ratio stood at 15.6% as of June 30, compared with 15.41% as of March 31.
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