Singapore-based private equity player Clermont Group is likely to join AION Capital-backed Clix Capital in the acquisition of capital-starved Lakshmi Vilas Bank, said Business Standard.
In mid-June, VCCircle had reported that Clix Capital, a non-bank lender controlled by private equity firm AION Capital, had shown preliminary interest to acquire Lakshmi Vilas Bank.
Persons in the know told Business Standard that Clermont is in talks to invest up to $200 million (Rs 1,500 crore) for up to 20% stake in the bank.
“The capital infusion, which is expected to close ahead of the merger, may help the bank to stay afloat till the merger is approved by the Reserve Bank of India (RBI),” one of the persons said.
The bank has been on the lookout for a buyer for over two years due to lack of capital and weak financials.
In April last year, Lakshmi Vilas Bank and Indiabulls Housing Finance Ltd had agreed to an all-stock merger.
However, in October 2019, RBI rejected this merger, a month after it imposed lending curbs on the bank due to high bad loans, lack of sufficient capital to manage risks and a negative return on assets for two consecutive years.