Patanjali Acquires Ruchi Soya For Rs 4350 Crore; Takes Control Over Brands Like Nutrela, SunRich & More
Since months of ups and downs, the NCLT has finally okayed the Baba Ramdev-led Patanjali Ayurved’s bid to take over edible oil player Ruchi Soya. This could help Ramdev save his sinking company, a prize that Patanjali had been eyeing for a long time.
The thing is that the debt-ridden company Ruchi Soya owes over Rs 9,345 crore to lenders and around Rs 2,800 crore to other creditors.
NCLT Gives its Nod to Patanjali
The NCLT approval comes after it dismissed the petitions filed by Standard Chartered Bank and Singaporean lender DBS. The approval is subject to certain conditions and modifications including filing of affidavits showing the source of funds and details of the resolution process cost. These have to be submitted before the next hearing on August 1.
Ruchi Soya, immersed in debt owes SBI the maximum, Rs. 1,800 crore; Central Bank of India Rs 816 crore; Punjab National Bank Rs 743 crore and Standard Chartered Bank India Rs 608 crore and Rs 243 crore to DBS. The resolution, hence comes over 60% haircut to the lenders.
Speaking of Debts and Funds
Out of the aggregate amount of Rs 4,350 crore, a sum of Rs 4,235 crore shall go towards each class of creditors and stakeholders and the rest Rs 115 crore towards equity infusion for improving operations of Ruchi Soya.
The tribunal is also seeking clarity on the source of funds of about Rs 600 crore, which is part of the bid amount.
The average liquidation value submitted by registered valuers is Rs 2,391 crore, and the fair value submitted by registered valuers is Rs 4,162 crore.
Patanjali’s Say on the Matter?
The NCLT said that Rs 600-crore of part- funding must be put in as internal accruals for the acquisition. To this, the counsel for the Haridwar-headquartered Patanjali reiterated that Rs 600 crore of Rs 4,350-crore fund would meet through internal accruals but it didn’t give a detailed break-up for the same, even thought the tribunal asked it to submit it, twice.
Patanjali’s MD Acharya Balkrishna said that tribunal’s such a move will help them expand positively in the Swadeshi movement and shall help to improve the infrastructure of Ruchi Soya, to help the conditions of farmers.
Patanjali acquired Ruchi Soya Industries in an insolvency auction started by lenders to recover over Rs 9,300 crore loans. The corporate insolvency resolution process of Ruchi Soya began in December 2017. In August 2018, Adani Wilmar was too on the look of acquiring Ruchi Soya wherein Rs 4,300 crore would go to financial creditors and Rs 1,700 crore would go into the company. It was supported by 96% of the creditors. However, in January 2019, Adani Wilmar withdrew its proposal citing delays in the corporate insolvency resolution process, giving Patanjali a heads up to be the only bidder in the race.
By this move, Patanjali could finally gain its momentum and could enter back into the picture focusing more on the agriculture and food processing sector as part of its strategy.