New York-based private equity investor JC Flowers & Co. LLC and three other firms have evinced interest in putting money into Yes Bank as the struggling Indian private-sector lender continues its quest for capital.
Tilden Park Capital Management LP, Silver Point Capital and OHA (UK) LLP (part of Oak Hill Advisors) are the other potential investors who have made non-binding offers, Yes Bank said in a stock-exchange filing.
“The bank and its financial advisors are currently in discussions with these investors on the commercial terms, including pricing, of their investments,” it said, adding that the transaction will be subject to regulatory approvals.
Yes Bank, which has been trying to raise funds to recover from the impact of bad loans, didn’t specify the amount that the four firms planned to invest.
However, the bank had said in December that it aimed to raise up to $2 billion (Rs 14,280 crore at current exchange rates) by selling shares to institutional investors and wealth managers. Shares of Yes Bank opened 5% higher on Thursday at Rs 36.95 apiece, giving it a market capitalisation of around Rs 9,400 crore.
This isn’t the first time Yes Bank has received interest from potential investors. In October last year, the bank said it had received a binding offer from a global investor to inject as much as $1.2 billion. That potential investor was Canada-based Erwin Singh Braich and Hong Kong’s SPGP Holdings. However, it rejected Braich’s offer last month due to regulatory concerns.
Yes Bank has lost more than 75% of its market value over the past year due to concerns related to rising bad loans and a capital crunch. The bank's chief executive officer, Ravneet Gill, has been trying to assuage investors' concerns, but hasn’t had much success so far. Those concerns will substantially ease, however, if a deal with JC Flowers and other investors goes through.
JC Flowers, one of the world’s largest distressed asset investors, already has a presence in India through an asset reconstruction company. The US firm had formed the ARC with Indian financial services company Ambit Pvt. Ltd in early 2016, with both holding a 47.5% stake each.
Last year, Mumbai-based stressed asset investor Eight Capital Management and London-headquartered Emso Asset Management agreed to acquire Ambit’s stake in the ARC, which was renamed JC Flowers Asset Reconstruction Company.