JC Flowers Yes Bank ARC Reaches Settlement with Subhash Chandra, Accepts 75% Reduction on ₹6,500-crore Dues

YES Bank
YES Bank

In a resolution that concludes a nearly two-year-long dispute between Yes Bank and media magnate Subhash Chandra, JC Flowers Yes Bank Asset Reconstruction Company, the bank’s asset reconstruction arm, has reached a significant agreement for a one-time settlement (OTS). This arrangement will lead to a substantial 75 per cent reduction in the debt amount.

Subhash Chandra will repay JC Flowers ₹1,500 crore in exchange for the restoration of ownership over the family’s shares in various assets, including Dish TV and Zee Learn, alongside three properties, among which is a central Delhi bungalow.

Sources closely associated with the matter have verified the signing of this pivotal agreement with BusinessLine. A knowledgeable individual stated, “Resolving the matter with Yes Bank was imperative, as the closure of the loan was a prerequisite for the ongoing ZEE-Sony deal.” Given Zee’s current circumstances, insiders suggest that this settlement is the optimal outcome that could have been achieved to ensure the seamless continuation of the transaction.

Under the terms of the one-time settlement, Zee will remit ₹1,500 crore to JC Flowers Yes Bank ARC, and within a span of 90 days, 25 per cent of this amount is set to be paid. The outstanding debt of Zee Group, amounting to ₹6,500 crore, constituted the largest liability within the JC Flowers Yes Bank ARC’s portfolio.

Back in April 2022, when Yes Bank transferred bad loans totaling ₹48,000 crore to the ARC, the bank’s exposure to the ZEE Group, including Dish TV, was indicated to be part of the divested loans. Since these assets were sold to the ARC at a discounted value of Rs 11,183 crore, the OTS agreement reached between Zee and JC Flowers will not impose any additional impact on Yes Bank’s financials, as conveyed by a reliable source.

Zee Learn had previously disclosed to the stock exchanges that on August 7, 2023, it formalized a settlement accord with JC Flowers ARC to address its obligations concerning loans procured by specific trusts and entities.

Zee Learn is responsible for operating a network of more than 1,700 pre-schools under the Kidzee brand, spanning over 550 cities across India and neighboring nations. Additionally, the company operates a chain of K–12 schools known as Mount Litera Zee School, along with vocational institutions, the Zee Institute of Creative Arts (ZICA), and the Zee Institute of Media Arts (ZIMA).

Simultaneously, Dish TV, previously overseen by Subhash Chandra’s sibling, Jawahar Goel, experienced a transition when Yes Bank triggered the pledged shares and consequently removed Goel from his position.

As the dust settles on this intricate negotiation, the resolution underscores the complexities and importance of financial settlements in ensuring the smooth progression of business activities and facilitating transactions. The agreement between JC Flowers Yes Bank ARC and Subhash Chandra stands as a pivotal instance of harmonizing financial interests for the greater continuity of economic operations.

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