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Yes Bank's credit committee to meet today to consider JV partner for ARC

New Delhi: Yes Bank's credit committee is likely to meet on Wednesday to consider the sale of Asset Reconstruction Corporation (ARC), suggested media reports.

The private lender's credit committee is due to meet today to discuss the sale of ARC, with JC Flowers chosen as the H1 bidder with an offer of close to Rs 12,100 crore.

Yes Bank is looking to transfer around Rs 51,000 crore of loans to ARC to fully clean up its books. The JC Flowers deal valued NPA's Yes Bank portfolio at Rs 12,100 crore, higher than other suitors, net of recoveries since valuation.

The beleaguered lender will use the Swiss Challenge method to select the preferred bidder. However, the lender remained silent and did not respond to inquiries.

Under the Swiss Challenge procurement method, the candidate submits a project proposal, which is then submitted to seek further proposals. Once received, the original candidate can match the best offer.

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However, Yes Bank will sell only an 80 percent stake in ARC, keeping the remaining 20 percent. The stock settled at Rs 13.34 on Tuesday, gaining more than 1 percent.

The performance of the lender's shares has been within a limited range in recent months. Shares of Yes Bank have dipped about 5 percent year-to-date basis, while stock is marginally up in the last one year.

Carlyle is front runner for buying a 5 to 10 percent stake in Yes Bank, along with other private equity (PE) firms. Yes, the bank's annual general meeting (AGM) is scheduled for July 15.

Earlier this month, Yes Bank reported load book growth of 14% year-on-year to Rs 1.9 lakh crore, thanks to strong loan demand. The lender said its deposits rose by more than 18 per cent to Rs 1.93 crore.

(Disclaimer: The recommendations, suggestions, views and opinions provided by experts are their own. They do not represent the views of the Business2Business)

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