Lakshmi Vilas Bank today said it has received an indicative non-binding offer from Clix Group. The struggling private sector bank is desperately looking for capital and is in talks with the Clix Group for a merger.
“Further to the process of considering and evaluating the proposed amalgamation with M/s. Clix Capital Services Private Limited (“Clix Capital”), M/s. Clix Finance India Private Limited (“Clix Finance”) and M/s. Clix Housing Finance Private Limited (“Clix Housing”) (collectively, the “Clix Group”), we are glad to inform that, the Bank has received an indicative non-binding offer from Clix Group. The Bank will continue to share information on material developments as and when they materialize,” the lender said in a communication to the BSE.
Last month, the lender’s chief executive S Sundar and six other directors were voted out by shareholders. Post the removal, the Reserve Bank appointed a three-member Committee of Directors (CoD) comprising independent directors Meeta Makhan, Shakti Sinha and Satish Kumar Kalra.
The South-based lender has been struggling to raise capital for the last few years. A proposal of merger with non-banking finance company Indiabulls Housing Finance was rejected by the RBI in 2019.
Subsequently, Lakshmi Vilas Bank had in June 2020 inked a non-binding agreement with the Clix Group for amalgamation.
For the full year 2019-20, LVB posted a net loss of ₹836.04 crore, marginally lower from the loss of ₹894.09 crore in 2018-19
As the bank was incurring losses for the previous 10 quarters, the Reserve Bank of India placed it under the Prompt Corrective Action (PCA) framework in September 2019.
Under the PCA, the bank has been asked to bring in additional capital, restrict further lending to corporates, reduce NPA and improve its provision coverage ratio to 70 per cent.
Stock of Lakshmi Vilas Bank closed 7% higher today.
