Money & Banking

Lakshmi Vilas Bank receives an indicative non-binding offer from Clix Group

Our Bureau Mumbai | Updated on October 08, 2020

Troubled Lakshmi Vilas Bank, on Thursday, said it has received an indicative non-binding offer from Clix Group.

“Further to the process of considering and evaluating the proposed amalgamation with Clix Capital Services Private Limited (Clix Capital), Clix Finance India Private Limited (Clix Finance) and 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,” it said in a regulatory filing.

The Committee of Directors, set up by the Reserve Bank of India to look after the daily affairs at lender, has been hopeful of the deal going through.

End to uncertainty

The development and a subsequent binding offer from Clix could put an end to the uncertainty surrounding the private sector lender, which otherwise may have to be merged with another bank.

Last month, at its annual general meeting, its shareholders rejected the appointment of seven directors, including its Managing Director and CEO, as well as statutory auditors. The RBI had then stepped in and set up a Committee of Directors of its independent directors.

The loss-making lender, which had been scouting for a potential investor for some time, has been talks in with Clix Capital, co-founded by former GE Capital CEO Pramod Bhasin, for a probable stake sale, and had signed a preliminary, non-binding letter of intent with the Clix Group.

On September 15, it had said the mutual due diligence is substantially complete, and the parties are in discussions on the next steps.

The lender is under Prompt Corrective Action norms of the RBI and reported a net loss of ₹112.28 crore in the first quarter this fiscal. Its Capital Adequacy Ratio (CAR), as per Basel Ill guidelines, was also at just 0.17 per cent as on June 30.

On Thursday, the shares of LVB closed 7.23 per cent higher at ₹17.8 apiece on the BSE.

 

Published on October 08, 2020

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