Private investment firm J.C. Flowers & Co., through its J.C. Flowers Asset Reconstruction Company, has purchased a portfolio of nonperforming assets (NPAs) from Yes Bank, a Mumbai, India-based bank, for approximately $6 billion.
The portfolio consists of nonperforming and underperforming corporate loans with significant real estate and infrastructure assets. After the deal, the ARC will act as the manager for the portfolio, looking to improve recoveries, with several personnel having worked on the portfolio at Yes Bank. The ARC purchased a 15 percent vertical portion of the NPAs, and Yes Bank will retain the rest in the form of security receipts.
“The turnaround Yes Bank has already accomplished in one year has been impressive, but by partnering with one of the world’s premier private investors, we hope to transform completely Yes Bank’s balance sheet and restore our position as a leading Indian lender,” comments Prashant Kumar, CEO of Yes Bank.
“This transaction, which marks the single largest non-performing asset sale ever in India, continues our firm’s tradition and reputation for undertaking the most complex and interesting investments in the financial services industry,” says Chris Flowers, CEO of J.C. Flowers. “When we established our ARC we saw strong opportunities in participating in the workout of India’s non-performing loans, and we look forward to working with the Yes Bank team.”
KPMG India acted as financial advisor and Wadia Ghandy and Veritas Legal were the legal advisors to J.C. Flowers on this transaction.