Clix Capital to acquire Lakshmi Vilas Bank through a merger agreement
Author : Saipriya Iyer | Published Date : 2020-06-17
Clix Capital, an AION backed non-bank lender, has reportedly shown its preliminary interest to procure Lakshmi Vilas Bank. In a latest stock exchange filing, the private sector bank stated that it has already inked a non-binding intent letter regarding a proposed amalgamation of the bank with Clix Capital.
The bank also stated that this proposed amalgamation would be subject to finishing of due diligence in 45 days along with all regulatory approvals. However, the financial details pertaining to the deal have not been unveiled yet.
This instance is the bank’s second attempt seek an investor that can save it from its troubled finances. In fact, Lakshmi Vilas bank has been looking for a buyer for more than two years owing to weak financials and lack of capital.
Earlier, in April 2019, Indiabulls Housing Finance and Lakshmi Vilas Bank had signed an all-stock merger agreement. But in September 2019, the RBI (Reserve Bank of India), imposed lending limitations on the bank owing to its lack of adequate capital in efforts to manage risks, high bad loans, as well as negative returns on assets over a period of two consecutive years. Approximately a month after the RBI imposed these restrictions, it also rejected the bank’s proposed merger with Indiabulls.
Meanwhile, the bank is also under investigation by law enforcement authorities regarding the alleged misappropriation of its funds by its own directors.
Lakshmi Vilas Bank witnessed significant changes in its top-level management in 2019, with Parthasarathi Mukherjee resigning from the post of CEO in August. Mukherjee had held that post for about four years, working as the CEO since 2015. In 2020, Subramanian Sundar became the interim CEO and was supposed to hold that post until April-end. However, the tenure period was extended, initially to end of May and then again up until November.
The bank has been witnessing huge losses over the past two years. During the October-December financial quarter of 2019-20, the bank incurred a net loss of INR 334.5 crore. It had suffered a loss of INR 456.5 crore a year prior.
Source credit: https://www.vccircle.com/aion-backed-clix-capital-eyes-troubled-lakshmi-vilas-bank/
About Author
Saipriya Iyer . .
Saipriya Iyer presently works as a content developer for fractovia.org. Having dabbled with the domain of content creation for nearly half a decade, she now boasts of an enviable portfolio, holding substantial experience in penning down pieces related to technology, finance, and a wide spectrum of other industry verticals. A qualified computer engineering graduate from the University of Pune, Saipriya can often be found leveraging her knowledge of software technology and electronics in her write-ups. She can be contacted at- [email protected] | https://twitter.com/saipriya_i
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