Lakshmi Vilas Bank announced a slight incremental due assiduity which was appealed by Clix Group had been accomplished and either side was in the procedure of discounting a workable and co-operatively acceptable framework.
Due to the cash crisis, Lakshmi Vilas Bank (LVB) added its need to attain an early conclusion to the merger deal with the Clix group without negotiating on its core interest. This comes in the wake of reports that Clix is miserable with the delay in reaching the deal. With the lag in attaining the deal, Lakshmi Vilas Bank (LVB) delivered on indicating a non-binding offer on October 8 from Clix.
Shakti Sinha, independent director and part of the three-member committee of directors (CoD) endorsed by the RBI to run the daily operations of Lakshmi Vilas Bank, informed FE that both the teams are gathering together regularly and negotiation are moving on.
He also mentioned that it is a complicated thing, the company craves to perform it separately. Though the company wants to do it fast, and to be equitable to the stakeholders of the bank. The company wishes to reach an early conclusion without strike a balance on the core interest of the bank, when asked about the hold-up and the tentative deadline to conclude. There are 2 rounds of negotiations with Clix group which have been finished, said sources close to the development. There is a slight incremental due diligence that was requested by the Clix group that has been completed said the bank in the last week.
According to Sinha, serious negotiations have been started only less than 2 weeks ago and usually, the process would take a bit longer for a deal of this magnitude. Though he did not clarify the obstacles, sources said the main stumbling block now is about how much equity would Clix bring into the bank and what percentage would be the debt part. Lakshmi Vilas Bank anticipates around Rs 1,400 crore into its books through the merger.
They anticipate a contingent liability of Rs. 720 crore related to transactions involving former Religare promoters and Clix also wants Lakshmi Vilas Bank to make full provisions against the contingent liability and mention that the bank will have to give back money if it loses the case against RFL.