Patanjali Seeks More Time To Complete Ruchi Soya Transaction
Patanjali seeks more time from NCLAT to complete Ruchi Soya acquisition.
Patanjali Ayurved Ltd. sought more time from the National Company Law Appellate Tribunal to complete its purchase of insolvent Ruchi Soya Industries Ltd., two people aware of the matter said.
The move is seen as a precautionary measure as the Baba Ramdev-owned company is likely to deposit the funds in an escrow account by Monday evening. Once the funds are in an escrow account—controlled by State Bank of India—the lenders will begin the process of distributing it among all members of the committee of creditors, the persons told BloombergQuint on the condition of anonymity. This, they said, may take two days.
The committee had set Dec. 16 as the final date for settlement of dues.
The bidder will pay about Rs 4,200 crore to the financial creditors of Ruchi Soya, while operational creditors are set to receive Rs 90 crore. Financial creditors, according to claims admitted in the case, are owed Rs 8,907 crore, indicating a 53 percent haircut. The total settlement amount that Patanjali proposed for the deal is Rs 4,350 crore, including charges accumulated over time for the resolution process.
Shailendra Ajmera, resolution professional for Ruchi Soya, declined to comment on BloombergQuint’s queries. Spokespersons for SBI and Patanjali have yet to respond to emails sent to them.
Ruchi Soya, India’s largest edible oil maker, was sent for insolvency proceedings in December 2017. After a close bidding war with Adani Wilmar, Patanjali managed to win. In July, the National Company Law Tribunal approved Patanjali’s Rs 4,350-crore bid for Ruchi Soya.
Patanjali’s settlement with Ruchi Soya’s lenders came on a day when ArcelorMittal and Nippon Steel completed their joint takeover of insolvent Essar Steel Ltd. Essar Steel’s lenders were repaid Rs 42,000 crore against their dues worth Rs 49,000 crore.
The resolution of two large stressed assets is likely to improve asset quality for Indian banks.