Singaporean lender DBS seeks more payout from Ruchi Soya deal

Published : May 8, 2019, 8:13 PM IST

Singaporean lender DBS Bank on Wednesday moved the NCLT seeking a higher payout from the Rs 4,350-crore offer by Patanjali to take over the crippled edible oil firm Ruchi Soya.

Ruchi Soya

Mumbai: Singaporean lender DBS Bank on Wednesday moved the NCLT seeking a higher payout from the Rs 4,350-crore offer by Patanjali to take over the crippled edible oil firm Ruchi Soya.

An NCLT bench of judges VP Singh and Ravikumar Duraisamy asked Ruchi Soya and DBS, which holds the first the charge for the plant and the machinery of the crippled the company, to file their detailed submissions by May 10.

Making its case for a relook at the payout for financial creditors, DBS said it enjoys the first charge for the plant and the machinery of Ruchi Soya which owes Rs 243 crore to it through external commercial borrowing.

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"If the company had gone for liquidation we would have got Rs 217 crore, which is 90 per cent of the dues. But the committee of creditors has taken everyone equally and because of that we will get only Rs 118 crore from the deal," DBS informed the tribunal.

Meanwhile, giving a detailed plan of its resolution for the target company, Patanjali informed the tribunal that of the Rs 4,350 crore offer, it will borrow Rs 3,233 crore from banks and Rs 1,185 crore will from internal accruals and other sources.

The fair value of Ruchi Soya is Rs 4,161 crore, which owes over Rs 9,345 crore to the lenders led by SBI.

Patanjali also said it has no plans to take the target company private by delisting. Instead, it said initially it will own 98 per cent of the equity and 1.7 per cent will be held by the public.

But to meet SEBI norm of 25 per cent public holding, within 18 days it will divest a little over 23 per cent to the public. As of now, the public holds 66 per cent in the crippled Ruchi Soya.

On May 1, the NCLT had given Patanjali Ayurved time till May 7 to file a detailed resolution plan for Ruchi Soya.

This happened after 96 per cent of the lenders agreed to the revised offer made by Patanjali to take over Ruchi Soya by increasing its bid by Rs 190 crore to Rs 4,350 crore.

Its initial offer was Rs 4,160 crore along with a Rs 1,700 crore working capital. The deal leaves the banks with a haircut of over 51 per cent of the debt.

Homegrown consumer goods player almost got a walkover after rival Adani Wilmar decided to pull out from the race late last year despite being the highest bidder.

With the acquisition of Ruchi Soya, Patanjali will become a major player in soybean oils and other edible oils.

In December 2017, NCLT had referred Ruchi Soya for insolvency on applications moved by Standard Chartered Bank and DBS Bank and appointed Shailendra Ajmera as the RP.

Patanjali, the lone player left, had last month increased its bid value by around Rs 140 crore to Rs 4,350 crore. The offer excludes capital infusion of Rs 1,700 crore.

Ruchi Soya owes over Rs 9,345 crore to financial creditors led by the State Bank, which has an exposure of Rs 1,800 crore, followed by Central Bank at Rs 816 crore, Punjab National Bank at Rs 743 crore and StanChart at Rs 608 crore.

Ruchi Soya has many plants and its leading brands include Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold and has one of the best functional and the largest infrastructure for soybean," Patanjali's Tijarawala said, as the reason revising the bid upwards.

Adani Wilmar, which sells edible oil under the Fortune brand, was the highest bidder last August after a long-drawn battle with Patanjali.

Adani Wilmar had then said the process was getting delayed as Patanjali moved the Mumbai NCLT.

The Haridwar-based Patanjali, which was clocking multi-fold growth in recent years, saw marginal growth in FY18, hit by GST, finishing at around Rs 12,000 crore.

In FY17 it had a turnover of Rs 10,561 crore, registering 111 per cent growth.