Lakshmi Vilas Bank hits 10 per cent upper circuit on Clix Group merger development
The shares of Lakshmi Vilas Bank jumped by 10 per cent intraday thereby, hitting its upper circuit of 10 per cent on Wednesday after the bank said that the due diligence process for its merger with Clix Group is substantially complete and both parties are now in discussions regarding the next step.
Earlier in June 2020, the bank had signed a preliminary, non-binding letter of intent (LOI) with Clix Capital Services Private Limited and Clix Finance India Private Limited as on June 15, 2020, in relation to the proposed amalgamation of Clix Group with the bank.
Under the non-binding LOI, the proposed amalgamation is subject to the completion of mutual due diligence, regulatory, and other customary approvals. The exclusivity period was extended until September 15, 2020, due to the prevailing pandemic situation.
This is the second attempt by Lakshmi Vilas Bank to find an investor to rescue it. The bank has been on the lookout for a buyer for over two years due to the lack of capital and weak financials.
Clix Capital is into financial services, offering various types of loans and is headed by Pramod Bhasin. A private equity firm, AION Capital Partners, holds a significant stake in the company.
The stock of Lakshmi Vilas Bank was locked at its upper circuit of 10 per cent after which, the trading was suspended at Rs 22.35 per share, up by 9.83 per cent or Rs 2 per share. The stock’s 52-week high is Rs 41.45 and the 52-week low is Rs 10.45 on BSE.