On Wednesday, JC Flower had been offered Rs 12,107crore against the loan booked to ensure that 25 per cent has recovered two familiars with the development, the company stated.

Cerberus Assets management bid a similar amount, which came a close second. Still, JC Flowers had the advantage of already owning an asset reconstruction company (ARC) in India, as per the statement.

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“Cerberus would have taken six months to get RBI approval for acquiring a new ARC, whereas JC Flowers already had an existing ARC structure in place,” said the company.

JC Flower has picked up a stake of up to 20 per cent in the company and will invest in Yes Bank to Rs 400 crore. The company has to pay in the joint venture for a bad loan made under a 15:85 structure with Rs 1800 crore or 15 per cent as per the agreement amount, which has to be paid upfront in cash to Yes Bank. ARC recovers the money from defaulters, and the rest will be paid as a security amount.

The bad loan book of Rs 49,000 crore includes so-called technical write-offs worth Rs 17,000 crore and soured investments. The deal with JC Flowers cleared the way for Yes Bank to raise Rs 10,000 crore of equity capital, which had been delayed due to the sizable amount of soured assets on its books. According to media reports, the bank is in talks with Advent International and Carlyle to raise equity shareholders.