Yes Bank Limited (NSEI:YESBANK) is likely to approve the transfer of stressed assets worth INR 480 billion ($6 billion) to private equity firm J.C. Flowers & Co. LLC at its next board meeting, said a source with direct knowledge. A rival consortium led by private equity firm Cerberus Capital Management, L.P. and Asset Reconstruction Company (India) Limited (ARCIL) withdrew its bid after submitting an expression of interest earlier in the year 2022, two sources said.

"We evaluated the loan accounts carefully and realized that there were so many fraud-hit and other problematic accounts that recovery would have been a challenge," said the second source. J.C. Flowers had submitted an initial bid of INR 111.83 billion for the entire stressed loan portfolio of INR 480 billion. The Cerberus-ARCIL consortium was supposed to submit a competing bid by September 7 but they withdrew, the sources said.

"Once the board approves the J.C. Flowers bid, it will take about a month for the paperwork to be completed and the assets to be transferred," the first source said. Yes Bank, J.C. Flowers, Cerberus and ARCIL did not immediately respond to an email request seeking comment. Yes Bank believes that its gross bad loans can come down to 2% from 13.4% in June quarter after transferring the bad loans to the new asset reconstruction company, it said earlier.

The bank had already provisioned for over 80% of the total loan value which will now be transferred to J.C. Flowers.