12 entities express their interest in Yes Bank’s ARC proposal

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

Some private equity firms that have expressed 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, it was said on condition of anonymity.

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

“The bank will examine the compatibility of the partnership. He hopes to complete the entire exercise by the end of October, ”the person said.

An email sent to a Yes Bank spokesperson went unanswered as of going to press.

Last month, Yes Bank invited expressions of interest to form the Asset Reconstruction Company (ARC). He hired EY as a process consultant. The bank had stipulated that an investor must have a minimum of assets under management and funds deployed globally of at least $ 5 billion. “ARC as a whole is neither well capitalized nor able to handle a large number of bad debts. The bank does not seek to transfer individual assets; instead, it will transfer the entire asset pool, ”the second person said. “The transition to the new failed bank is also excluded because it has not yet been put in place. “

Yes Bank will go through a transparent bidding process once the new ARC is in place, the person said, adding that they will be bidding for the entire pool of bad assets. This is Yes Bank’s second attempt to set up an ARC. The Reserve Bank of India rejected the first proposal because it did not want the bank to be the majority shareholder of an ARC due to potential conflicts of interest.

In the June quarter, Yes Bank posted the highest quarterly profit since December 2018 as bad debt provisions declined. Profit more than quadrupled to reach ??206.84 crore from a year ago. Its gross ratio of non-performing assets stood at 15.6% as of June 30, compared to 15.41% as of March 31. He restructured ??4,624 crores in loans as of June 30.

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