Troubled private sector lender Lakshmi Vilas Bank reported a net loss at a time its facing solvency issues and is in talks for a merger with non-bank lender Clix Capital Ltd.
The bank is in discussions with non-bank lender Clix Capital for a potential merger. According to its disclosures, the two parties are in the process of coming up with a structure that will be agreeable for both.
“There were minor incremental due diligence requested by Clix Group, which was completed this week,” the bank said in a statement.
The bank’s board has approved the issue of equity shares worth Rs 500 crore through a rights issue. It appointed ICICI Securities as merchant banker.
In September, Lakshmi Vilas Bank’s shareholders voted out seven directors from the bank’s board, including Managing Director and Chief Executive Officer S Sundar. Since then, the Reserve Bank of India has ordered that a committee of three directors run the bank’s daily affairs till a solution for this is found.
Last year, the bank was placed under the prompt corrective action framework of the Reserve Bank of India because of its financial position. Under the framework, the bank has to follow restrictions on lending, expansion and any other capital consuming activities.
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