Patanjali finally gets hold of Ruchi Soya
09 September 2019
The National Company Law Tribunal (NCLT) last week approved the Baba Ramdev-led Patanjali group's Rs4,350-cr plan to take over Ruchi Soya in an insolvency resolution process.
Creditors of Ruchi Soya will receive a maximum of Rs4,240 crore in repayments, a 65 per cent haircut to the verified claims of about Rs12,100 crore, according to a stock exchange filing. The remaining Rs110 crore will be used to finance the expansion of Ruchi Soya after the merger.
As per the filing, Rs4,053.19 crore will be paid to secured financial creditors, Rs40 crore to unsecured financial creditors, Rs90 crore to operational creditors, Rs25 crore to clear statutory dues, Rs14.92 crore to workmen/employees and Rs11.89 crore to provide counter bank guarantee.
Among financial creditors, State Bank of India (SBI) has the maximum exposure of around Rs1,800 crore, followed by Central Bank of India Rs816 crore, Punjab National Bank Rs743 crore and Standard Chartered Bank - India Rs608 crore.
A monitoring committee will be constituted to oversee the process, with three members each representing financial creditors and Patanjali group. Shailendra Ajmera, the resolution professional (RP) will act as the monitoring agent.
Ruchi Soya informed that the resolution applicant Patanjali group will infuse Rs204.75 crore as equity and Rs3,233.36 crore as debt. The acquirer will infuse another Rs900 crore through subscription of non-convertible debentures and preference shares in the SPV.
Patanjali also said it would infuse over Rs3,438 crore as equity and debt to settle dues of creditors of the debt-laden firm.
Patanjali Consortium Adhigrahan Pvt, a unit of Patanjali Ayurved Ltd, and three other companies will merge with Ruchi Soya, according to the stock exchange filing late on Saturday.
Shareholders of Patanjali Consortium will get one share of Ruchi Soya for each share they hold in the former.
With the acquisition of Ruchi Soya, Patanjali will become a major player in soyabean oils and other products.
Ruchi Soya has many manufacturing plants and its leading brands include Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold.
Patanjali almost got a walk over after rival Adani Wilmar decided to pull out from the race despite being selected the highest bidder.
Adani Wilmar, which emerged as the highest bidder in August last year after a long drawn battle with Patanjali, decided to withdraw from the resolution process in December 2018, citing delays that led to deterioration of Ruchi Soya's assets.
Ruchi Soya shares were up 1.1 per cent at Rs4.60 on Friday. They have slumped 49 per cent this year, in the ninth straight annual decline.