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Lakshmi Vilas Bank zooms 16% on receiving a non-binding offer from the Clix Group

Lakshmi Vilas Bank zooms 16% on receiving a non-binding offer from the Clix Group

Lakshmi Vilas Bank zooms 16% on receiving a non-binding offer from the Clix Group
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By Pranati Deva  Oct 9, 2020 11:15:13 AM IST (Updated)

Shares of Lakshmi Vilas Bank surged 16 percent on Friday after the lender announced that it had received an indicative non-binding offer from the Clix Group.

Shares of Lakshmi Vilas Bank surged 16 percent on Friday after the lender announced that it had received an indicative non-binding offer from the Clix Group.

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"Further to the process of considering and evaluating the proposed amalgamation 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 glad to inform that, the Bank has received an indicative non-binding offer from Clix Group. The Bank will continue to share information on material developments as and when they materialize," the lender said in a communication to the BSE.
The stock rose as much as 16 percent to Rs 20.65 per share on BSE.
In June, the lender had received a preliminary, non-binding letter of intent (LoI) from Clix Capital Services Private Ltd & Clix Finance India Private Ltd. CNBC-TV18 had reported quoting sources that the lender may be able to raise Rs 1,200- Rs 1,500 crore of investment from AION Capital-backed NBFC Clix Capital.
In October last year, the Reserve Bank of India (RBI) had turned down Lakshmi Vilas Bank’s proposed merger with Indiabulls Housing Finance.
Last month, the lender's chief executive S Sundar and six other directors were voted out by shareholders. Post the removal, the Reserve Bank appointed a three-member Committee of Directors (CoD) comprising independent directors Meeta Makhan, Shakti Sinha and Satish Kumar Kalra.
Gurugram-based Clix Capital, a digital, SME lending platform is 85 percent owned by AION Capital. It was launched after acquiring GE Capital’s commercial lending and leasing business, with AION Capital largely funding the buyout. AION Capital, in turn, is a joint venture between US-based private equity major Apollo Global Management and ICICI Venture.
Earlier this week, Brickwork Ratings (BWR) downgraded the rating of the bank's long-term bonds of Rs 50.50 crore. The rating downgrade necessarily factors in the rejection of seven directors of the bank, including the interim managing director and chief executive officer of the bank, by the bank’s shareholders. Also, the bank’s substantially weak capital position, very high levels of gross non-performing assets (NPAs) and continuous losses reported by the bank for the past 10 quarters, except Q4FY20 affected the ratings.
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