Yes Bank Limited (NSEI:YESBANK) is exploring options to sell more than INR 50,000 million worth of bad loans to the newly created National Asset Reconstruction Company Limited (NARCL), two people aware of the development said. This comes even as the private lender continues discussions with American distressed assets investors J.C. Flowers & Co. LLC and Cerberus Capital Management, L.P. The bank's management is deliberating on transferring the loans to NARCL as it looks to clean its books before fresh fundraising through a rights issue or a qualified institutional placement (QIP), the people cited above said on the condition of anonymity.

Yes Bank has already missed its deadline to complete the asset sale by 31 March. "The bank management is unhappy with the bids it has received from the two funds and has asked them to reconsider it," said one of the two people cited above. Responding to a query from Mint, a spokesperson for Yes Bank denied any plan to cancel the asset sale, which is being conducted via the Swiss challenge method wherein other interested parties will also be invited to bid for the assets and match the highest offer.

The sale of assets will take place as per the 15:85 structure, wherein 15% of the transaction value will be paid upfront, and the remainder will be in the form of security receipts to be redeemed, depending on recovery by the asset reconstruction company.