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12 entities express interest in YES Bank’s ARC proposal

According to experts familiar with the situation, Yes Bank Ltd. has received expressions of interest from a dozen investors interested in forming an asset rehabilitation firm with the private sector lender as a minority partner.

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 Capital are among the private equity firms that have expressed interest, according to people who spoke on the condition of anonymity.

Following negotiations with interested PE firms, the bank will shortlist possible investors, according to one of the two persons, who added that the shortlisted investors will then be asked to submit initial offers.

“The bank will assess the partnership's compatibility. The goal is to finish the exercise by the end of October, according to the source.

At the time of publication, an email submitted to a Yes Bank spokesman had gone unanswered.

Yes Bank solicited expressions of interest for the asset reconstruction company last month (ARC). It has enlisted the help of EY as a process adviser. The bank required that an investor have a minimum of $5 billion in assets under management and money deployed globally. “The current crop of ARCs is neither well-capitalized nor equipped to deal with a large number of bad loans. The bank will not be transferring individual assets; rather, the entire asset pool will be transferred "explained the second individual. “Shifting to the new bad bank is also out because it hasn't been set up yet."

Once the new ARC is up and running, Yes Bank will conduct a transparent bidding procedure, according to the source, which will solicit bids for the whole pool of poor assets. Yes Bank is attempting to establish an ARC for the second time. The Reserve Bank of India rejected the first plan, citing potential conflicts of interest in the bank being the primary shareholder of an ARC.

Yes Bank recorded its best quarterly profit since December 2018 in the June quarter, thanks to lower bad loan charges. From a year ago, profit increased by more than fourfold to 206.84 crore. As of 30 June, its gross non-performing asset ratio was 15.6 percent, up from 15.41 percent as of 31 March. It restructured ₹4,624 crore loans as of 30 June.


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