Lakshmi Vilas Bank board approves raising up to ₹500 crore via rights issue1 min read . Updated: 15 Oct 2020, 01:22 PM IST
- Last week, the lender said it has received a non-binding offer from non-banking finance company Clix group for a merger
The board of cash-strapped Lakshmi Vilas Bank (LVB) today approved raising of up to ₹500 crore through issuance of shares on rights basis to existing shareholders.
The board "considered and approved, inter-alia, subject to the necessary approvals, the raising of funds by issuance and allotment of equity shares or such other eligible securities of the Bank, for an aggregate amount of up to Rs.500 crores (Rupees Five Hundred crores), by way of a rights issue, on such terms (to be decided by the Board or a duly constituted committee of the Board at a later date), in accordance with applicable law, including Companies Act, 2013 and the rules made thereunder and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, each as amended," the lender said in a communication to exchanges.
As per a resolution passed by its board and shareholders in August and September respectively, the bank has got approval for raising funds by way of equity shares and other instruments through various modes, including further public offer, rights issue or qualified institutions placement for an aggregate amount of up to ₹1,000 crore.
Last week, the lender said it has received a non-binding offer from Aion-backed non-banking finance company Clix group for a merger.
The Chennai-based private sector bank was jolted on September 25 when its shareholders voted out seven directors on its board, including CEO S Sundar and promoters K R Pradeep and N Saiprasad.
Following this, the Reserve Bank of India (RBI) appointed a three-member team to run the bank under Meeta Makhan as chairperson and Shakti Sinha and Satish Kumar Kalra as members.
The lender has been dogged by high bad loans and the attendant regulatory curbs since 2019. The bank had posted a net loss of ₹112.28 crore in the June 2020 quarter.
Almost a fourth of its advances are dud assets now, with gross non-performing assets of 25.40 per cent as of June-end, against 17.30 per cent a year ago.
Lakshmi Vilas Bank's shares were trading 0.3% lower at ₹18.25 on BSE. (With PTI Inputs)