Private sector lender Yes Bank is planning to launch an asset reconstruction company (ARC) in the next 6-9 months. The firm has three public sector banks (PSB) as partners and is now looking for a foreign partner. Its public sector bank partners are Bank of Baroda, Union Bank of India and Bank of India, reports Business Standard.
While Yes bank plans to hold a 29.5% stake in the firm, the three public sector banks will have a joint 33% stake. The rest of the 37.5% stake will be given to the foreign partner. It was earlier in talks to get JP Morgan as a foreign partner. Yes Bank is not planning to acquire retail NPAs, but is looking at long-term assets on the corporate loan books.
Yes Bank is also planning to launch a Distressed Asst Fund with a West Asian bank, whose corpus will be Rs 500 crore. Another player in this space, Asset Reconstruction Company of India (Arcil), is raising a $600 million fund to invest in distressed bank assets.
Investment bank Edelweiss also formed Edelweiss Alternate Asset Advisors (EAAA), a distressed assets arm, with an initial target corpus of $200 million last year. It’s also looking for a foreign partner for its asset reconstruction arm.
Several other asset reconstruction firms have already got foriegn partners. Stockbroker Rakesh Jhunjhunwala promoted Pegasus Asset Reconstruction Company sold a 26% stake to Deutsche Bank. International Asset Reconstruction Company (IARC) also sold stake to Netherlands Development Finance Corporation FMO and London-based Standard Bank Plc.