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JC Flowers in JV with Yes Bank to offload distressed loans worth Rs 51,000-Cr

Economic Times  

Yes Bank has picked JC Flowers Asset Reconstruction Company (ARC) as its joint venture partner to offload nearly INR 51,000 crore of distressed loans. Yes Bank invited bids for its distressed loans portfolio soon after the Reserve Bank of India in March 2021 rejected its plan to set up an ARC as its subsidiary. The transaction, once completed, will be India's largest sale of distressed assets. JC Flowers offered INR 12,000 crore. Yes Bank will soon hold a Swiss challenge auction wherein it would invite counter bids with JC Flowers ARC's offer as an anchor bid. If Yes receives a higher offer, JC Flowers will have the right to match it. Of JC Flowers ARC's INR 12,000 crore offer, 15% will be paid upfront in cash while the balance would be in the form of security receipts to be redeemed as the ARC recovers money from defaulting borrowers. As per the proposal submitted by the ARC, Yes Bank will pay 1.5% management fee and 5% recovery incentive on each account.