India-based Lakshmi Vilas Bank (LVB) has received a preliminary, nonbinding letter of intent (LOI) from Clix Group to acquire a majority stake.
Private equity firm Aeon Capital owns 85% in Clix Capital Services and Clix Finance India.
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Clix Group intends to acquire a 51% stake in LVB for INR14-16bn ($184-210m).
LVB stated that its board has considered the proposed offer from Clix.
In a regulatory filing, the lender said: “The Bank has received a preliminary, non-binding letter of intent (LOI) from Clix Capital Services Private Limited & Clix Finance India Private Limited dated June 12, 2020, which the Board of Directors of the Bank has considered for further processing in their meeting held today (15 June 2020).”
“In the event, the discussions between the contracting parties in relation to the proposed transactions are successful and definitive agreements are executed, we will make appropriate disclosures as required under the provisions of applicable law.”
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By GlobalDataClix is expected to begin due diligence on LVB next week and send a formal application to the Reserve Bank of India (RBI) for approval.
The proposed deal is subject to the receipt of regulatory approvals and other customary approvals.
Since August last year, RBI has placed the bank under the prompt corrective action (PCA) framework due to low capital and high non-performing assets (NPAs).
In October 2019, the central bank did not give approval to the bank for the merger with Indiabulls Housing Finance.
Since then, LVB has been looking for new investors.
