LVB drops 4% as Clix CEO says merger talks can't go on and on

NEW DELHI: Shares of Lakshmi Vilas Bank declined over 4 per cent in Thursday's trade on an ET report suggesting AION Capital-backed Clix Capital could walk away from the proposed merger with the private bank if discussion on the deal continues to drag on, without a firm conclusion timeline.

Pramod Bhasin, the founder of Clix Capital told ET: "We have to decide this urgently. We are happy to walk away from the deal and get on with our lives. This cannot go on forever."

The stock fell 4.5 per cent to hit a low of Rs 15 on BSE.

The comment came at a time when the bank's auditor said urgent steps are needed to augment the lender's capital base in the FY21.

In its quarterly results, the bank had said that it has made significant progress with Clix group for the proposed amalgamation of Clix Capital Service and Clix Finance India into the bank. The private lender reported a net loss of Rs 397 crore for the September quarter compared with a loss of Rs 357 crore in the year-ago quarter.

"There was minor incremental due diligence requested by Clix Group, which was completed this week. Now, the respective sides are in the process of a workable and mutually acceptable framework," LVB had said earlier.

LVB auditor recently said that the assumption of going concern is dependent upon the bank's ability to achieve improvements in liquidity, asset quality and solvency ratios, augment its capital base and mitigate the impact of Covid-19. "And thus a material uncertainty exists that may cast a significant doubt on the Bank's ability to continue as a going concern," LVB auditor P Chandrasekar LLP said.