Patanjali Completes Acquisition Of Ruchi Soya
Pedestrians walk outside a warehouse operated by Patanjali Ayurved Ltd. near the Multi-modal International Cargo Hub Airport at Nagpur. (Photographer: Dhiraj Singh/Bloomberg)

Patanjali Completes Acquisition Of Ruchi Soya

Patanjali Ayurved Ltd. has completed its acquisition of Ruchi Soya Industries Ltd. under the Insolvency and Bankruptcy Code, according to two people in the know.

The ayurvedic products maker paid Rs 4,111 crore to financial creditors of Ruchi Soya as part of this transaction, the people told BloombergQuint on the condition of anonymity. The total payment for the assets now stands at Rs 4,350 crore, which included payments to operational creditors, statutory dues and resolution cost. Ruchi Soya’s assets will be formally handed to Patanjali Ayurved tomorrow, the people said.

A spokesperson for Patanjali Ayurved told BloombergQuint over the phone that the transaction has been completed.

State Bank of India, which was the largest financial creditor to Ruchi Soya, received Rs 883 crore, against its claims worth over Rs 1,800 crore. Central Bank of India, which had claimed Rs 815 crore from Ruchi Soya is set to receive Rs 397 crore.

Total financial creditor claims admitted by the resolution professional stood at Rs 9,300 crore. The transaction indicates a 56 percent haircut for financial creditors. This is the second large insolvency case which has been resolved this week, after ArcelorMittal took over Essar Steel Ltd. for Rs 42,000 crore.

Patanjali paid for the transaction after borrowing funds from lenders, including SBI, Punjab National Bank Ltd. and Allahabad Bank.

On Monday, Patanjali Ayurved had approached the National Company Law Appellate Tribunal to seek more time to complete the acquisition. The tribunal had previously set Monday as the deadline to complete the purchase. On Tuesday, the NCLAT allowed Patanjali Ayurved time till Dec. 23.

Ruchi Soya, India’s largest edible oil maker, was admitted for insolvency proceedings in December 2017, with Patanjali managing to win after a close bidding war with Adani Wilmar Ltd.. In July, the National Company Law Tribunal approved Patanjali’s Rs 4,350-crore bid.

Shailendra Ajmera, the resolution professional for Ruchi Soya, declined to comment. Consulting firm EY had advised the resolution professional.

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