Patanjali Ayurved Ltd, the consumer goods company backed by yoga guru Baba Ramdev, has made an improved offer in its bid to take over debt-laden edible oils maker Ruchi Soya Industries Ltd.
The revised proposal of Rs 4,350 crore in cash upfront is nearly Rs 200 crore more than it had offered earlier. It also pips Adani Wilmar Ltd’s bid of Rs 4,100 crore.
“We are ready to bail out Ruchi Soya which has the biggest infrastructure for soyabean. It’s a national asset,” Patanjali spokesperson SK Tijarawala told Press Trust of India.
The lenders of Madhya Pradesh-headquartered Ruchi Soya are currently evaluating Patanjali’s revised offer, people privy to the development told VCCircle.
“Yes, we have received a revised offer from Patanjali and the Committee of Creditors (CoC) are asking to revise it by around Rs 300 crore,” a senior official at one of the lenders told VCCircle. “The lenders are discussing the offer and will also decide on the share of all creditors soon. Adani Wilmar will have to be let go.”
Adani Wilmar, which also manufactures edible oils, is a joint venture between India’s Adani Group and Singapore’s Wilmar International.
The Committee of Creditors is also said to be considering the forfeiture of Adani Wilmar’s earnest deposit of Rs 50 crore as it had withdrawn from the resolution process in January citing an extended delay.
Ruchi Soya has a total debt of about Rs 12,000 crore, with around Rs 9,400 crore owed to its financial creditors. It has several manufacturing plants and it sells food products and edible oils under brands including Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold.
In December 2017, Ruchi Soya Industries was referred to the NCLT following petitions from creditors Standard Chartered Bank and DBS Bank. Shailendra Ajmera was appointed the resolution professional (RP) by the National Company Law Tribunal under the Insolvency and Bankruptcy Code.
After two rounds of bidding, around 96% of the lenders had approved the resolution plan submitted by Adani Wilmar in August last year. The company had emerged as the highest bidder at Rs 6,000 crore after a prolonged battle with Patanjali.
Adani Wilmar’s offer comprised Rs 4,300 crore to the financial creditors and an equity infusion of around Rs 1,700 crore in the company.
The Haridwar-based Patanjali Group came second with a bid of around Rs 5,700 crore, including an infusion of about Rs 1,700 crore in Ruchi Soya, which is among the top 28 corporate defaulters in the second list referred by the Reserve Bank of India for insolvency proceedings.
Patanjali Ayurved had approached the National Company Law Tribunal challenging the decision of Ruchi Soya’s lenders to approve Adani Wilmar’s Rs 6,000 crore takeover bid citing violation of Section 29 (A) of the IBC.
According to the section, any resolution applicant (bidder) is ineligible to submit a plan if they are connected or are a related party to the company or assets they are bidding for under the IBC resolution process.
Patanjali had also questioned the appointment of Cyril Amarchand Mangaldas as the resolution professional’s legal advisor as the law firm was already advising the Adani Group.
In December 2018, Adani Wilmar had written to the resolution professional regarding significant delays in the resolution process.
A month later, Adani Wilmar withdrew its offer citing the inordinate delay, claiming that it was leading to a deterioration in the value of Ruchi Soya's assets.
Last month, the debt-laden firm reported a net profit of Rs 6.29 crore for the third quarter of the 2018-19 fiscal against a net loss of Rs 1,956.59 crore in the same quarter of the previous financial year.