Yes Bank Acquires Minority Shareholding 9.9% Stake In JC Flowers ARC

Yes Bank is going to acquire a minority shareholding 9.9% stake in JC Flowers ARC. Both Yes Bank & JC Flowers ARC are in the process of requesting the necessary RBI approvals.

Yes Bank informed bourses on November 28 after market hours that it had signed a share purchase agreement (SPA) with JC Flowers Asset Reconstruction Company (ARC) to purchase a 9.9 percent stake in the company for Rs 11.43 per share.

According to the bank, a later acquisition of an additional 10% stake is subject to the necessary regulatory permissions.

Also: The Carlyle Group & Advent International To Nominate New Board Members For Yes Bank

After receiving no further challenger proposals, the Yes Bank board of directors authorized the sale of stressed debts worth Rs. 48,000 crore to JC Flowers on September 20.

The bank wants to take part in the ARC as a small shareholder. The statement read, “This will be a sideline to the bank’s primary line of business.” JC Flowers ARC had ₹ 595 crore in assets under management as of March 31, 2022, and had a Rs 19.9 crore yearly turnover.

Yes Bank’s standalone net profit for the three months ending September 30, 2022, decreased by 32.2 percent year over year to Rs 152.8 crore. The private lender’s net profit for the same period in the previous fiscal was Rs 225.50 crore.

Also Read: India Ratings downgrades Yes Bank issuer rating from ‘A’ to ‘A-‘

However, total revenue for Q2 FY23 was higher at ₹ 6,394.11 crore as opposed to Rs 5,430.30 crore during the same period last year. 

Gross non-performing assets (NPAs, also known as bad loans) decreased from 14.97 percent of gross advances in the prior period to 12.89 percent in the current one.

Prashant Kumar, the bank’s senior executive, thinks the GNPA ratio can drop to under two percent when bad loans are transferred to the ARC.