Mumbai : Yes Bank Ltd. Exploring options to sell more than The newly created National Asset Reconstruction Company Limited (NARCL) has a bad loan of Rs 5,000 crore, two people aware of the development said.
It comes even as the private lender continues discussions with US troubled asset investors Jesse Flowers & Co and Cerberus Capital.
The bank’s management is contemplating transferring the loan to NARCL as it seeks to clear its books before fresh fundraising through a rights issue or a Qualified Institutional Placement (QIP), said the people cited above. Said on condition.
Yes Bank has already missed its deadline to complete the sale of assets by March 31.
“The bank management is unhappy with the bids received from the two funds and has asked them to reconsider it,” said one of the two people mentioned above.
Mint reported in January that Cerberus Capital had placed a high bid of close 12,000 crore for assets, of which a major chunk has been declared fraud, where the chances of recovery are slim.
“However, the bank has made a fresh assessment that it can recover the amount on its own” 5,000 crore and hence, the dilemma is where to include these properties in the transaction,” said the second person cited above.
Responding to a question by Mint, a Yes Bank spokesperson denied any plans to cancel the sale of the asset, which is being conducted through the Swiss challenge method, in which other interested parties would also be allowed to sell the property. will be invited to bid for and match the highest offer.
The sale of the asset will take place as per the 15:85 structure, with an advance payment of 15% of the transaction value, and the balance in the form of security receipts to be discounted, on a recovery basis by the asset reconstruction company. ,
Last year, the central bank had given its in-principle approval to Yes Bank to set up an ARC business, provided it is a minority investor, and there is an arms length between seller and buyer.
However, Mint reported on January 13 that the bank wanted the right to appoint chairman and key managers in departments of the proposed asset reconstruction company in which it would hold only a 20% stake.
Successful sale of bad loans is crucial for the revival of Yes Bank, which is looking to raise funds from outside investors to boost its balance sheet.
The bank’s board has approved the recent fundraising of 10,000 crore through a mix of debt and equity.
The Economic Times reported on March 3 that private equity giant Carlyle is considering a 3,750-4,500 crore investment in Yes Bank with Peer Advent International.
Report says Yes Bank in talks with private equity investors to raise Growth capital worth ₹7,500-11,250 crore to bolster its balance sheet comes two years after the regulator put it under the leadership of State Bank of India to curb a possible run on deposits.