Patanjali Ayurveda’s proposed acquisition of Ruchi Soya has reached the final stages with the Committee of Creditors (CoC) meeting on Tuesday to clear the proposed deal, two officials directly aware of the developments said.
“The deal is likely to be announced this month,” one of the officials mentioned above, said
Patanjali Ayurved spokesperson SK Tijarawala confirmed the committee of creditors meeting on Tuesday but declined to comment on details.
An email sent to Ruchi Soya’s spokesperson remained unanswered till press time.
Last month, the Baba Ramdev led Patanjali revised its offer to acquire the debt-laden Ruchi Soya Industries to Rs 4,350 crore, Rs 200 crore more than it had offered earlier and topping Adani Wilmar’s bid of Rs 4,100 crore.
Of the Rs 4,350 crore, Rs 115 crore will come as company equity, while the balance Rs 4,235 crore will be distributed among financial creditors. Public sector lenders IDBI Bank and SBI have the highest exposure to Ruchi Soya, the bankrupt edible oil company. Adani Wilmar was the other bidder, but withdrew recently citing delay in completion of the insolvency process.
“Patanjali will submit details of the distribution of Rs 4,235 crore to financial creditors in a couple of days,” said an official close to the development. “The committee of creditors will meet in the third week of April again to discuss the disbursal of funds,” he added.
Packaged foods maker Ruchi Soya, saddled with an overall debt of close to Rs 12,000 crore, owns brands such as Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold. At the end of 2017, the debt-laden company was referred to the National Company Law Tribunal (NCLT) following petitions from creditors Standard Chartered Bank and DBS Bank.
For the Haridwar-based Patanjali Ayurved, which approached the NCLT against the lenders’ decision in favour of Adani Wilmar, the potential acquisition of Ruchi Soya will be its biggest.
Shailendra Ajmera is the resolution professional (RP) appointed by NCLT on the application of creditors Standard Chartered Bank and DBS Bank under the Insolvency and Bankruptcy Code.
Patanjali Ayurved, which makes staples, personal care and packaged foods, saw revenues for the year ended March 2018 decline 10% to Rs 8,135 crore from Rs 9,030 crore in FY17 after five years of impressive growth, according to data from research platform Tofler. Company chief executive Acharya Balkrishna had attributed the slowing sales to its supply chain and distribution network not being able to keep pace with its growth, in addition to internal restructuring.
The potential acquisition of Ruchi Soya will help the ayurveda bellwether gain captive brand share, the largest oil seed extraction capacity in the country, and 24 plants of crushing, milling, refining and packaging edible oils. Ruchi Soya is also one of the country’s largest exporters of valueadded soy products.
Source: Economic Times, April 11, 2019