What will happen to Lakshmi Vilas Bank

Stocks
1

Hi,

im holding 1000 shares in Lakshmi Vilas bank, I heard RBI writing off equity shares off LVB. what does that mean ? will i lose everything if so? what will happen to LVB if DBS amalgamation happens?

2

Generally when mergers happen equity shareholders of the entity that is being merged get shares of the entity with which it is being merged with. In the case of Lakshmi Vilas Bank’s merger with DBS Bank, this will not be the case, as equity shareholders will not be getting anything in return they will have to likely write-off this as a bad investment.

3

So you mean the share price will reach zero soon?

5

In present merger scheme the entire paid up equity capital will be written-off, so shares hold no value anyways. Likely the shares will be unlisted from exchanges once the merger process is completed, we will have to wait and see what happens.

1 Like
6

thanks @shub

7

bro… as things are… those shares are anyways worthless, sadly there’s nothing much one can do, will just have to write it off as bad investment and move on.

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8

the entire amount of the paid-up share capital and reserves and surplus, including the balances in the shares or securities premium account of the transferor bank, shall stand written off. (2) On and from the appointed date, the transferor bank shall cease to exist by operation of this Scheme, and its shares or debentures listed in any stock exchange shall stand delisted without any further action from the transferor bank, transferee bank or order from any authority.
****** In view of the above intimation, the equity shares of Lakshmi Vilas Bank Ltd shall not be available for Trading w.e.f. Thursday, 26th November,
@SubairNA

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9

looks like there might be some relief for lakshmi vilas bank shareholders… nothing final yet but this report says:

DBS Bank should furnish an undertaking in the Court that in case the Court concludes and directs it to provide compensation to LVB, they will pay the same, the portal reported, citing the interim order.

Besides, as security, DBS Bank should create a separate reserve fund in its books of account to the extent of the face value of shares of the transferor company (LVB) and maintain the same subject to further orders.