Lakshmi Vilas Bank said today that it has received a non-binding indicative offer from Clix Group. The struggling private sector bank is desperately seeking capital and is in talks with Clix Group for a merger.
“In addition to the process of consideration and evaluation of the proposed merger 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 pleased to report that the Bank has received a non-binding indicative offer from Clix Group. The Bank will continue to share information on material developments as they are materialize, “the lender said in a communication to the BSE.
Last month, the lender’s chief executive, S Sundar, and six other directors were removed by shareholders. After the removal, the Reserve Bank appointed a three-member Committee of Directors (CoD) comprised of independent directors Meeta Makhan, Shakti Sinha and Satish Kumar Kalra.
The South-based lender has been struggling to raise capital for the past few years. The RBI rejected a proposed merger with non-bank finance company Indiabulls Housing Finance in 2019.
Subsequently, Lakshmi Vilas Bank signed a non-binding agreement with Clix Group for the merger in June 2020.
For the full year 2019-20, LVB recorded a net loss of ₹Rs 836.04 million, slightly less than the loss of ₹Rs 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 Rapid Corrective Action (PCA) framework in September 2019.
Under the PCA, the bank has been asked to provide additional capital, restrict additional loans to businesses, reduce NPAs, and improve its provision coverage ratio to 70 percent.
Lakshmi Vilas Bank shares closed 7% higher today.
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