Private equity major Cerberus Capital is still interested in buying the stressed assets book of beleaguered YES Bank and has made an ‘all cash’ offer to the tune of ₹8,300 crore, sources told businessline.
An email regarding the ‘binding offer’ was sent by Cerberus in mid-September to a senior executive in YES Bank, which has kept it under the wraps and not announced it to the stock exchanges or shareholders, the sources said.
There was a bitter battle between PE majors JC Flowers and Cerberus Capital to grab the ₹48,000-crore stressed assets book of YES Bank. While Cerberus had offered the entire payment based on the book value to YES Bank upfront, JC Flowers will be paying only 15 per cent upfront of the ₹12,000-crore offer it made. The remaining 85 per cent payment by JC Flowers will be staggered over the years depending on the recoveries that it make.
Cerberus was even contemplating approaching the Reserve Bank of India with its deal since it was ready to offer cash upfront, but no decision has been taken in this regard, the sources said.
Further, the sources say that JC Flowers offer has a fee structure attached to it. Under the same, YES Bank will have to pay around 1.5 per cent per annum management fees on the entire offer amount, 5 per cent collection fees and 20 per cent upside fees on the higher amount of recoveries. In addition, the lender will have to buy a 20 per cent stake in the asset reconstruction company of JC Flowers for which it will have to put in extra money, the sources said.
On September 22, YES Bank had informed the stock exchanges that its board on September 20 approved the bid from JC Flowers since it did not find another bidder in the Swiss Challenge it had conducted. Swiss challenge is a method wherein a party outbids the other party with a higher bid. The lender had kept the 15:85 structure and a condition that the bidder came with an asset reconstruction company. Cerberus tied up with ARCIL but later just made an all-cash offer. YES Bank has now already announced a stake purchase deal with the ARC of JC Flowers and even some of the existing management team of the private bank’s stressed asset book is likely to be moving there, the sources said.
Both YES Bank and Cerberus Capital did not comment on email queries from businessline.