Patanjali closer to acquiring Ruchi Soya with Rs4,350-cr offer
12 April 2019
Patanjali Ayurved’s proposed acquisition of Ruchi Soya has reached the final stages with the Committee of Creditors (CoC) on Tuesday meeting to decide on the Patanjali’s revised offer, reports citing sources close to the development said.
“The deal is likely to be announced this month,” one of the officials mentioned above, said.
The Baba Ramdev led Patanjali last month revised its offer to acquire debt-laden Ruchi Soya Industries to Rs4,350 crore, trumping a Rs4,100-crore offer n offer by rival Adani Wilmur.
Of the Rs4,350 crore, Rs115 crore will come as equity, while the balance Rs4,235 crore will be distributed among financial creditors. Public sector lenders including IDBI Bank and SBI, which have the highest exposure in Ruchi Soya.
Adani Wilmar withdrew recently from the bidding citing delay in completion of the insolvency process.
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 per cent to Rs8,135 crore from Rs9,030 crore in FY17 after five years of impressive growth, according to data from Tofler. Chief executive Acharya Balkrishna attributed the slowing sales to problems connected with its supply chain and distribution network and an internal restructuring.
The potential acquisition of Ruchi Soya will help Patanjali a 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 value added soy products.