The board of Lakshmi Vilas Bank (LVB) will meet on Friday to consider issue of equity shares.
The meeting assumes significance as the board would decide whether to allot equity shares to New Delhi-based real estate firm Indiabulls Housing Finance Ltd. (IBHF) or to anyone else, said a top-ranking official at LVB on condition of anonymity.
These shares would be issued on a preferential basis after obtaining shareholders’ nod either through an extraordinary general meeting or via postal ballot, LVB said in a regulatory filing.
It may be recalled that last week, LVB board accepted the proposal of merging itself with IBHF through a share-swap deal. The proposal has to pass the Reserve Bank muster.
“If RBI does not approve the merger with IBHF, we have to look for alternatives. At this stage, we can’t talk more,” he said.
Market sources said that for the last few months LVB had been trying to rope in strategic investors to bolster its capital adequacy.
The LVB board, on Friday, will also consider raising ₹250 crore through issue of Basel-III compliant additional tier-1 debt instruments.