Bidders, Including JC Flowers ARC and Acre, Vie for Yes Bank’s ₹4,200 Crore NPA Portfolio

Several notable investors, including JC Flowers ARC, Acre ARC backed by Ares, and Edelweiss ARC, are reportedly among the eight participants in the bidding process for Yes Bank’s ₹4,200 crore bad loans, covering both corporate and retail segments, according to sources informed by ET. Other Asset Reconstruction Companies (ARCs) in the fray include Omkara ARC and ARCIL.

The corporate segment comprises eight accounts that transitioned into non-performing status after 2019. This includes entities such as Prometheon Enterprises with a debt of ₹1,496 crore, UK-based Malvern Travels with a debt of ₹537 crore, and Katerra India with ₹521 crore.

Yes Bank’s distressed corporate loan portfolio is valued at ₹3,091 crore, while the retail portfolio amounts to ₹1,142 crore.

Yes Bank opted for cash-only bids, and interested investors had until January 6 to submit their proposals.

Representatives from Yes Bank, ACRE ARC, Edelweiss ARC, JC Flowers ARC, Omkara ARC, and ARCIL ARC have not responded to requests for comments.

The sale also encompasses a retail portfolio of ₹1,142 crore, covering personal loans, vehicle loans, and credit card loans. Most of these loans turned non-performing in or after 2019.

As of September 2023, Yes Bank has reduced its gross NPAs to ₹4,319 crore from ₹27,419 crore a year earlier. The gross NPA ratio stands at 2%, and the net NPA ratio is 0.9%.

In contrast to the previous sale in December 2022, where JC Flowers ARC acquired a pool of NPA assets worth ₹48,000 crore from Yes Bank, this time, the sale is conducted on a cash basis. The 2022 transaction saw JC Flowers ARC managing the acquired portfolio for recoveries, holding 15% of the NPAs, while Yes Bank retained the remainder in the form of security receipts.

The earlier portfolio included nonperforming and underperforming large corporate loans with significant exposure to real estate and infrastructure assets.