Yes Bank shortlists JC Flowers as its ARC partner; deal to help clean-up bank's balance sheet

Private sector lender Yes Bank has shortlisted US-based private equity firm, JC Flowers, as its joint venture partner for its proposed asset reconstruction company (ARC), said two people directly aware of the matter on the condition of anonymity.

CNBC-TV18 has reported earlier this year that foreign private equity firms like Cerberus, and Apollo Global ​were in the fray to partner up with Yes Bank for its ARC foray, along with JC Flowers. Bids were invited from all suitors, and JC Flowers has emerged as the winning bidder, CNBC-TV18 has learnt. The bank is understood to be in the final stages of formalising its agreement with JC Flowers.

This is the second attempt by the bank to set up its own ARC after the Reserve Bank of India turned down its earlier proposal in March last year. The bank had thus proposed a new structure, where it would hold a minority 20 percent stake in the proposed ARC, whereas an 80 percent stake would be held by its foreign joint venture partner. Yes Bank is looking to transfer approximately Rs 51,000 crore of its bad loans to the ARC, and in the process completely clean up its balance sheet.