Patanjali completes Rs4,350-cr acquisition of Ruchi Soya under IBC
19 December 2019
Baba Ramdev’s Patanjali Ayurved on Wednesday completed its acquisition of Ruchi Soya, the maker soya food and edible oil brand Nutrela by remitting Rs4,350 crore, to close the debt resolution plan under the new Indian Bankruptcy Code.
Patanjali settled Rs4,350 crore of dues Ruchi Soya had towards financial creditors by infusing Rs1,100 crore equity and arranging another Rs3,250 crore via debt.
Patanjali has transferred both the debt and equity portion in a current account with State Bank of India, which will then be transferred to all the lenders in the consortium.
Patanjali has proposed to repay a total of Rs4053.19 crore to key lenders to Ruchi Soya, which is roughly 45 per cent of their claims of Rs9,384 crore against Ruchi Soya.
While State Bank Of India will be recovering Rs883 crore, two other state owned lenders - Central Bank Of India and Punjab National Bank- will be recovering Rs397 crore and Rs361 crore, respectively.
Workmen and Employees are to be paid Rs 14.92 crore under Patanjali’s approved plan, and unsecured financial creditors Rs 40 crore.
To fund this acquisition, Patanjali Ayurved tied up with five banks, namely SBI (Rs 1300 crore), PNB (Rs 700 crore), Union Bank of India (Rs 600 crore), Syndicate Bank (Rs 400 crore) and Allahabad Bank (Rs 300 crore), a banking executive told CNBC-TV18.
Through this acquisition, Patanjali will own edible oil plants as well as soyabean oil brands such as Mahakosh and Ruchi Gold.
In December 2017, the National Company Law Tribunal (NCLT) ordered start of insolvency proceedings against Ruchi Soya on application of Standard Chartered Bank and DBS Bank. Shailendra Ajmera, part of consultancy firm EY, was appointed as resolution professional (RP).
Patanjali had sought seven days’ time to implement the resolution plan, after the NCLAT deadline of December 16 to implement the plan ended, and the company was still in the process of tying up equity for the acquisition.