Patanjali to infuse Rs 3,438 cr in Ruchi Soya to settle dues

Baba Ramdev-led Patanjali Ayurved, which got the NCLT approval last week to acquire Ruchi Soya in an insolvency process, will infuse over Rs 3,438 crore as equity and debt to settle dues of creditors of the debt-laden firm. Ruchi Soya informed the exchanges that the National Company Law Tribunal (NCLT), Mumbai in its order dated September 6 approved Patanjali's Rs 4,350 crore resolution plan with certain modifications that were accepted by the bidder.

Ruchi Soya informed that resolution applicant Patanjali group will infuse Rs 204.75 crore as equity and Rs 3,233.36 crore as debt. The amount will be infused in a special purpose vehicle 'Patanjali Consortium Adhigrahan Pvt Ltd', which will be later amalgamated with Ruchi Soya.

Another Rs 900 crore will be infused by the Patanjali group through the subscription of non-convertible debentures and preference shares in the SPV. It will also provide a credit guarantee of nearly Rs 12 crore. On April 30 this year, a committee of creditors had approved the Patanjali group's Rs 4,350 crore resolution plan to take over Ruchi Soya, which is into the edible oil business. Lenders will have to take a hair cut of around 60 percent.

The bid, approved by the NCLT, is binding on Ruchi Soya as well as its employees, members creditors, guarantors, and other stakeholders involved, the filing added. Out of the Rs 4,350 crore offered by Patanjali group, Rs 4,235 crore would be utilized to pay creditors while Rs 115 crore would be used for capital expenditure and working capital requirements of Ruchi Soya.

As per the filing, Rs 4,053.19 crore will be paid to secured financial creditors, Rs 40 crore to unsecured financial creditors, Rs 90 crore to operational creditors, Rs 25 crore to clear statutory dues, Rs 14.92 crore to workmen/employees and Rs 11.89 crore to provide a counter bank guarantee. A monitoring committee will be constituted to oversee the process, with three members each representing financial creditors and the Patanjali group. Shailendra Ajmera, the resolution professional (RP) will act as the monitoring agent.

In December 2017, the NCLT had referred Ruchi Soya for insolvency proceedings on the application of financial creditors Standard Chartered Bank and DBS Bank. Shailendra Ajmera was appointed as RP to manage the company's affairs and conduct insolvency proceedings.

Ruchi Soya Industries owes around Rs 9,345 crore to financial creditors. Among financial creditors, State Bank of India (SBI) has the maximum exposure of around Rs 1,800 crore, followed by Central Bank of India Rs 816 crore, Punjab National Bank Rs 743 crore and Standard Chartered Bank - India Rs 608 crore.

With the acquisition of Ruchi Soya, Patanjali will become a major player in soybean oils and other products. Ruchi Soya has many manufacturing plants and its leading brands include Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold.

Homegrown FMCG major Patanjali almost got a walkover after rival Adani Wilmar decided to pull out from the race despite being selected as the highest bidder. Adani Wilmar, which emerged as the highest bidder in August last year after a long drawn battle with Patanjali, had in December 2018 written to the RP regarding significant delays in a resolution process that led to the deterioration of Ruchi Soya's assets.

Later, Adani Wilmar, which sells edible oil under the Fortune brand, withdrew from the race.