<p>The administrator of India's Yes Bank told Reuters a deal with some bondholders who have opposed a state-led rescue was under discussion, possibly clearing the way for a restructuring of the stricken lender.</p>.<p>"We are in the process," said Prashant Kumar, the administrator appointed by the Indian central bank, which has taken control of Yes Bank. He hoped a deal would be reached later on Wednesday or on Thursday, he said, but declined to provide details of the discussions.</p>.<p>Under the terms of India's rescue plan, set out earlier this month, the State Bank of India would take a 49% stake in Yes Bank, which is struggling with bad loans.</p>.<p>But some Yes Bank bondholders filed a court petition against the rescue deal, which would see them taking a writedown, according to a source and a document seen by Reuters.</p>.<p>TV channel ET Now reported on Wednesday the bondholders had proposed to convert 85 billion Indian rupees ($1.15 billion) worth of bonds into 17 billion rupees in equity, citing unnamed sources.</p>.<p>Axis Trustee Services Ltd, which represents several investors in Additional Tier 1 (AT1) notes issued by Yes Bank, did not immediately respond to a request for comment.</p>.<p>AT1 securities are a type of contingent convertible bond (CoCo) - perpetual instruments designed after the financial crisis to try to ensure investors, rather than taxpayers, would be on the hook if a bank runs into financial difficulties.</p>.<p>India's central bank, the Reserve Bank of India (RBI), also did not immediately respond to a request for comment.</p>.<p>Yes Bank has battled for months to raise the capital it needs to meet regulatory requirements. Since late last year, it had been trying to raise $2 billion, and in February delayed its quarterly results.</p>.<p>The bank is the third significant Indian financial institution to unravel in the last six months, following the RBI's moves to take control of Dewan Housing and Punjab & Maharashtra Co-operative Bank.</p>.<p>The bondholders' petition was set to be heard in court on Wednesday but the case did not appear on a Bombay High Court schedule seen by Reuters.</p>.<p>Yes Bank's founder and former managing director, Rana Kapoor, who was arrested on Sunday on money-laundering charges, will remain in police custody until March 16, an Indian court said on Wednesday.</p>.<p>Kapoor denies accusations and his lawyer said he had been made into a scapegoat because of public resentment at Yes Bank after the central bank imposed limits on withdrawals.</p>
<p>The administrator of India's Yes Bank told Reuters a deal with some bondholders who have opposed a state-led rescue was under discussion, possibly clearing the way for a restructuring of the stricken lender.</p>.<p>"We are in the process," said Prashant Kumar, the administrator appointed by the Indian central bank, which has taken control of Yes Bank. He hoped a deal would be reached later on Wednesday or on Thursday, he said, but declined to provide details of the discussions.</p>.<p>Under the terms of India's rescue plan, set out earlier this month, the State Bank of India would take a 49% stake in Yes Bank, which is struggling with bad loans.</p>.<p>But some Yes Bank bondholders filed a court petition against the rescue deal, which would see them taking a writedown, according to a source and a document seen by Reuters.</p>.<p>TV channel ET Now reported on Wednesday the bondholders had proposed to convert 85 billion Indian rupees ($1.15 billion) worth of bonds into 17 billion rupees in equity, citing unnamed sources.</p>.<p>Axis Trustee Services Ltd, which represents several investors in Additional Tier 1 (AT1) notes issued by Yes Bank, did not immediately respond to a request for comment.</p>.<p>AT1 securities are a type of contingent convertible bond (CoCo) - perpetual instruments designed after the financial crisis to try to ensure investors, rather than taxpayers, would be on the hook if a bank runs into financial difficulties.</p>.<p>India's central bank, the Reserve Bank of India (RBI), also did not immediately respond to a request for comment.</p>.<p>Yes Bank has battled for months to raise the capital it needs to meet regulatory requirements. Since late last year, it had been trying to raise $2 billion, and in February delayed its quarterly results.</p>.<p>The bank is the third significant Indian financial institution to unravel in the last six months, following the RBI's moves to take control of Dewan Housing and Punjab & Maharashtra Co-operative Bank.</p>.<p>The bondholders' petition was set to be heard in court on Wednesday but the case did not appear on a Bombay High Court schedule seen by Reuters.</p>.<p>Yes Bank's founder and former managing director, Rana Kapoor, who was arrested on Sunday on money-laundering charges, will remain in police custody until March 16, an Indian court said on Wednesday.</p>.<p>Kapoor denies accusations and his lawyer said he had been made into a scapegoat because of public resentment at Yes Bank after the central bank imposed limits on withdrawals.</p>