Non-binding offer from Clix for Lakshmi Vilas Bank

NEW DELHI:  Beleaguered Lakshmi Vilas Bank (LVB) on Thursday said it has received an indicative non-binding offer from Clix Group for their proposed merger. The move is significant since the private sector lender is desperately looking for capital to stay afloat. Besides, LVB is also grappling with a leadership crisis after its shareholders ousted seven directors of the bank, including the CEO and statutory auditors, last month.

“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 said in a stock exchange filing. 

Clix Capital is a financial services firm offering various types of loans and was co-founded by former GE Capital CEO Pramod Bhasin. On September 15, LVB had said that the mutual due diligence process for a merger with Clix Group was “substantially complete” and that both parties were in discussions on the next steps. With NPAs ruling high and capital adequacy ratio (CAR) inadequate, the RBI had put the bank under watch in September last year.

According to the June quarter results, LVB has a CAR—a measure of the financial stability—of just 0.17 percent as on June 30, as against the RBI requirement of 8 per cent. Similarly, the Tier I component of CAR stood at a negative 1.83 per cent, limiting its ability to lend. The distressed finances of the bank prompted the auditors to cast doubts if the lender could continue as a going concern. The auditors also indicated that survival would depend on capital infusion.