After roping in JC Flowers Asset Reconstruction Private Ltd (JC Flowers ARC) as its partner for the sale of bad loans, Yes Bank is planning to raise up to $1 billion to boost its core capital base. The private sector lender is reportedly in the final stages of negotiations with private equity investors such as Carlyle and Advent for the fund-raising, and they are also likely to get a board seat.

Yes Bank had changed its articles of association to bring in these firms. Yes Bank managing director and chief executive Prashant Kumar confirmed that the lender is planning to raise $ 1 billion during this financial year, pointing out that though the market conditions are not conducive right now, it would like to conclude the process in 2022-23 itself.

The bank’s core equity ratio stands at 11.5 per cent right now and will go to over 14 per cent after the capital raise, he added. Last week, Yes Bank had said that it has signed a binding term sheet with JCF ARC LLC and JC Flowers ARC for strategic partnership with regard to sale of identified stressed loans. While the term sheet became effective as on July 15,the bank decided that the JCFlowers ARC will be base bidder for a proposed sale of an identified stressed loan portfolio aggregating to up to Rs48,000 crore of the bank.

In line with the Reserve Bank of India guidelines, the bank is planning to run a transparent bidding process on Swiss Challenge basis for sale of the portfolio Kumar disclosed the sector bank will invest up to Rs 350crore for a potential 20 per cent stake in the ARC (asset reconstruction company). He added that the transfer of gross non-performing assets of Rs 48,000 crore — which is a legacy corporate loans— to the ARC will reduce the NPAs to 2 per cent from the present 14 per cent.