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Yes Bank, having divested a distressed loan portfolio worth Rs 48,000 crore a year ago, has now initiated the process to offload another portfolio, valued at just over Rs 4,200 crore. Last year, Yes Bank successfully made a significant sale of Rs 48,000 crore worth of non-performing assets (NPAs) to JC Flowers ARC, marking one of the largest secondary market trades in the distressed loan segment. The private bank has now dispatched notices to finance companies and asset reconstruction companies (ARCs) soliciting potential buyers for its corporate and retail loans, carrying an outstanding debt of Rs 4,233 crore.
The corporate loan portfolio comprises eight accounts, amassing a total debt of Rs 3,091 crore, while the retail portfolio amounts to Rs 1,142 crore. Unlike the previous sale, Yes Bank is seeking cash-only offers this time. Noteworthy entities in the corporate portfolio include two UK-based companies: Prometheon Enterprises Ltd., UK, with a debt of Rs 1,496 crore, and Malvern Travels, UK, with a debt of Rs 537 crore. Both are affiliates of Cox and Kings, a travel agency that went bankrupt. Another notable inclusion is Katerra India Pvt Ltd, which recently entered corporate insolvency with a debt of Rs 521 crore and with Yes Bank as its sole lender.
In addition, Yes Bank aims to sell loans of Indrajit Power, a company promoted by the Miglani family of Uttam Galva that supplies power to Uttam Galva’s steel units and has an outstanding debt of Rs 353 crore. The bank has also listed real estate developers such as ATS Realworth Pvt Ltd (Rs 115 crore), ATS Infrastructure (Rs 8 crore), ATS Township (Rs 26 crore), and Umritha Infrastructure (Rs 16 crore). While expressions of interest have been invited, Yes Bank has not disclosed a reserve price or bidding date for the corporate loan book.
In a separate notice, the bank has called for expressions of interest for its retail portfolio of Rs 1,142 crore, which includes personal loans, vehicle loans, credit card portfolios, commercial vehicle loan books, construction equipment loans, and healthcare and hospitality equipment loans.
Yes Bank communicated to ARCs that this exercise is initiated to identify an anchor bidder and plans to hold a Swiss challenge auction upon finalizing an anchor bidder.
As of September 2023, the gross non-performing assets of Yes Bank stood at Rs 4,319 crore, compared to Rs 27,419 crore a year ago, according to an analyst presentation. This strategic move to divest distressed assets aligns with the bank's ongoing efforts to strengthen its financial position and streamline its balance sheet. The success of this divestment would further contribute to the bank's liquidity and overall financial health, positioning it for sustained growth in the competitive banking landscape.
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