Patanjali acquisition of Ruchi Soya in the final stages

April 11, 2019

Patanjali Ayurved’s proposed acquisition of Ruchi Soya has reached the final stages with the Committee of Creditors (CoC) meeting to clear the proposed deal and would be announced this month.

Patanjali, last month had revised its offer to buy 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.

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, the potential acquisition of Ruchi Soya will be its biggest as it will gain captive brand share, the largest oilseed 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.

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