Chennai based Lakshmi Vilas Bank has planned to raie Rs.1500 crore to fund business growth and increase foreign shareholding to up to 74 %. LVB will seek approval from its shareholders in the upcoming Annual General Meeting which is scheduled on September 25.
LVB stated that the board of directors have given their approval for raising of funds including the issue of equity of shares, ADR’s foreign currency convertible bonds, GDR’s, preference share convertible into equity shares among othrs in one or more tranches.
The bank stated, “whilst no specific instrument has been identified at this stage, in the event, the issue will be mannered in such a manner that the proceeds of the same would not exceed Rs. 1000 crore.”
The bank will also seek shareholders’ approval for raising another Rs. 500 Crore by issuing debt securities.
It further added, “Since the proposed fund raising activities may result in the issue of equity shares to investors who may or may not be members of the bank, consent of the members is being sought. The proposed issue of securities is in the best interest of the bank and your directors recommend the resolution of your approval.”
LVB posted a net loss of Rs. 836 crore during the year end March 31,2020. In a auditors report it was seen that there has been a decline in the bank’s deposit base since September 2019 and increase in NPA ratios. The bank’s tier 1 ratio turned negative at -0.88%.
The board of directors have proposed to obtain the consent of the members of the bank for borrowing and raising fund by issue of debt securities pursuant to the relevant provisions of the applicable circulars or guidelines issued by RBI.
To meet its capital requirements, LVB has sought RBI’s approval to amalgamate Indiabulls Housing Finance and Indiabulls Commercial Credit Ltd into itself in May 2019.
