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LVB board to fulfill on October 15 to contemplate rights challenge

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NEW DELHI: Cash-strapped Lakshmi Vilas Bank (LVB) on Monday mentioned its board will meet later this week to contemplate issuance of shares on rights foundation to current shareholders.

“A meeting of the board will be held Thursday, October 15, 2020 to consider and approve the issue of securities of the bank to existing shareholders of the bank on rights challenge,” it mentioned in a regulatory submitting.

As per a decision handed by its board and shareholders in August and September respectively, the financial institution has obtained approval for elevating funds by the use of fairness shares and different devices via numerous modes, together with additional public supply, rights challenge or certified establishments placement for an combination quantity of as much as Rs 1,000 crore.

Last week, the lender mentioned it has acquired a non-binding supply from Aion-backed non-banking finance firm Clix group for a merger.

The Chennai-based non-public sector financial institution was jolted on September 25 when its shareholders voted out seven administrators on its board, together with CEO S Sundar and promoters Ok R Pradeep and N Saiprasad.

Following this, the Reserve Bank of India (RBI) appointed a three-member crew to run the financial institution below Meeta Makhan as chairperson and Shakti Sinha and Satish Kumar Kalra as members.

If the merger with Clix materialises, the networth of the financial institution will greater than double to Rs 3,100 crore from the present Rs 1,200 crore. Clix Capital has a networth of Rs 1,900 crore that may turn into the networth of the financial institution after the deal.

The lender has been dogged by excessive dangerous loans and the attendant regulatory curbs since 2019. In September, its board had authorized fundraising plans for Rs 1,500 crore and likewise to extend overseas shareholding to as much as 74 per cent from 12.35 per cent.

The financial institution had posted a internet lack of Rs 112.28 crore within the June 2020 quarter.

Almost a fourth of its advances are dud belongings now, with gross non-performing belongings of 25.40 per cent as of June-end, in opposition to 17.30 per cent a 12 months in the past.

Lakshmi Vilas Bank’s shares closed 3.89 per cent decrease at Rs 18.55 apiece on BSE.

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