3-member LVB panel working on rights issue – Times of India

NEW DELHI: The three-member committee comprising Lakshmi Vilas Bank (LVB) directors is working on a rights issue, which is expected in a couple of months, while pursuing Clix Capital’s proposal for acquiring a stake in the southern lender.
The panel comprising Meeta Makhan, Shakti Sinha and Satish Kumar Kalra met on Monday, where the issue was discussed amid indications that the RBI was willing to let the interim management responsible for the bank’s day-to-day operations work on a plan for the beleaguered bank.
The capital infusion through the proposed rights issue is expected to not just bolster the capital base, but also provide comfort to stakeholders, especially depositors, sources told TOI. The move comes as the deal with Clix Captial is expected to take a few months before it is finalised and has to clear RBI’s scrutiny.
Due diligence has been done by Clix Capital and LVB’s bankers have also studied the proposal and the investor’s credentials, sources said, adding that depositors have shown faith in the bank and it was like business as usual on Monday, the first working day after it came to light that shareholders had voted against seven directors, including the CEO, and the auditor.
On Monday, the bank’s share closed over 5% higher at more than Rs 20 on the BSE.
Sources said that the RBI had been prompt in mandating the panel of directors to take charge of day-to-day operations with the approval coming through within three hours on Sunday. The bank had reported losses of Rs 112 crore during April-June and is weighed down by a pile of bad debt that added up to nearly a quarter of the loans given by it.