30 May 2019: Yoga guru Baba Ramdev-promoted Patanjali Ayurved has sought help from state-controlled banks to fund its Rs 4,350 crore acquisition of Ruchi Soya Industries. In April, Patanjali Ayurved acquired the debt-ridden edible oil company Ruchi Soya with a bid of Rs 4,325 crore in an insolvency auction started by lenders to recover over Rs 9,300 crore loans.
The homegrown FMCG major is actively considering raising debt with a maturity of five years and above from State Bank of India, Punjab National Bank, Bank of Baroda, Union Bank and Jammu & Kashmir Bank, people aware of the development told the Economic Times.
The company is all set to join hands with the lenders to raise over Rs 3,700 crore while Rs 600 crore will be generated through internal accruals, the financial daily report said.
The publication quoted one of the persons as saying, “The funding is in the final stages of negotiation and the interest rates will be finalised soon. Patanjali had earlier approached several non-banking channels but it backtracked after these investors sought high level of disclosures.”
It is worth noting that Ruchi Soya Industries has dues of about Rs 9,345 crore to financial creditors. State Bank of India (SBI) has the maximum exposure of approximately 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.
In August 2018, Adani Wilmar emerged as the highest bidder after a long-drawn legal dispute with Patanjali, had in December 2018 wrote to the resolution professional, highlighting major delays in the insolvency process that led to the decline of Ruchi Soya’s assets.
Patanjali had in April raised its bid price by about Rs 200 crore to Rs 4,350 crore. This excluded a fund infusion of Rs 1,700 crore into the company.
The Haridwar-based company will become a key producer of soybean oils and other products following the acquisition of Ruchi Soya. The transaction may give a boost to Patanjali uphold its earlier growth momentum.