Yes Bank has initially acquired a 9.9% shareholding in JC Flowers ARC. The lender said that it plans to acquire a further 10% shareholding in the asset reconstruction company, subject to requisite regulator approvals. Yes Bank intends to participate as a minority shareholder in the ARC, in partnership with JC Flowers.
The 9.9% stake represented 12,370,050 equity shares in JC Flowers ARC at ₹11.43 per share.
Yes Bank and JC Flowers ARC are each in the process of applying for the requisite approvals from RBI.
At around 9.21 am, Yes Bank shares are trading at an intraday high of ₹17.30 apiece up by 0.58% on BSE. Its market cap is around ₹43,347.04 crore.
On Monday, Yes Bank entered into a share subscription and purchase agreement with JCF ARC LLC and J.C. Flowers Asset Reconstruction along with a shareholders agreement with CF ARC LLC, JC Flowers ARC, and Emso Asset Management — to acquire a total of 19.9% of the equity share capital in JC Flowers ARC.
Of the total 19.9%, initially, Yes Bank acquired 9.9% shareholding in JC Flowers ARC. While it plans to acquire the remaining 10% in due course, subject to requisite regulatory approvals.
As per the guidelines, prior approval of RBI is required to be obtained by — a banking company for the acquisition of 10% or more shareholding in an asset reconstruction company (ARC); and an ARC for including any entity as a sponsor of the ARC.
Thereby, each of the bank and JC Flowers ARC will require respective approvals for the acquisition of 10% or more of the paid-up share capital of the ARC.
Giving rationale to the deal, Yes Bank in the regulatory filing said, “The Bank intends to participate as a minority shareholder in JC Flowers ARC, in partnership with JC Flowers (a global reputed fund), to participate in the business of asset reconstruction. This is ancillary to the main line of business of the Bank.”
JC Flowers ARC is an asset reconstruction company incorporated on May 06, 2015. As of March 31, 2022, the ARC has a turnover of ₹19.91 crore.
