LVB gets indicative non-binding offer from Clix Group

By: |
October 9, 2020 12:30 AM

The bank on September 15 had said the mutual due diligence with Clix Capital was substantially complete, and the parties were in discussions on next steps.

Asked about the amount that would come into the bank, Sinha said they had given some figures, but it would be subject to certain other things. “So, to work out exact figures, we need a couple of days.”Asked about the amount that would come into the bank, Sinha said they had given some figures, but it would be subject to certain other things. “So, to work out exact figures, we need a couple of days.”

Troubled private sector lender Lakshmi Vilas Bank (LVB) on Thursday said it has received an indicative non-binding offer from Clix Group, moving a step closer to amalgamation of the group’s entities with itself.

LVB in a stock exchange disclosure said further to the process of considering and evaluating the proposed amalgamation with Clix Capital Services, Clix Finance India and Clix Housing Finance, the bank has received an indicative non-binding offer from Clix Group.

When contacted, Shakti Sinha, independent director and part of the three –member committee of directors (CoD) approved by the RBI to run the day-to-day operations of LVB, told FE: “Just that we hope. We have to now negotiate it quickly and carefully.” The two-member directors team of LVB, which is looking into the details, the offer by the Clix Group and due diligence, would now see what is the way forward, he said.

Asked about the amount that would come into the bank, Sinha said they had given some figures, but it would be subject to certain other things. “So, to work out exact figures, we need a couple of days.”

The bank on September 15 had said the mutual due diligence with Clix Capital was substantially complete, and the parties were in discussions on next steps.

While LVB was pursuing the Clix merger and the resultant capital infusion, it also started looking at other possible options of capital raising, including rights issue, follow-on offer and QIP. Sinha in an earlier interaction had told FE that the CoD had started hectic parleys for exploring all options for raising capital. “We hope to raise anything between Rs 500 crore and Rs 700 crore in the short term,” he had said.

In a related development, credit rating agency Brickwork Ratings (BWR) on Wednesday downgraded the rating from BWR BB+ (credit watch with developing implications) to BWR B+ (credit watch with negative Implications) for LVB’s unsecured redeemable non-convertible subordinated lower tier II bonds – Series VII (Option B) of Rs 50.50 crore.

LVB, which had been placed under the RBI’s PCA framework since 2019, had narrowed its net loss to Rs 112.28 crore for Q1FY21 from net loss of Rs 237.25 crore in Q1FY20. Gross NPA rose to 25.40% in the reporting quarter, from 17.30% in the corresponding quarter of the last fiscal. Similarly, the net NPA increased to 9.64% from 8.30%. The provision coverage ratio had stood at 72.58%.

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