The National Company Law Tribunal has approved Patanjali Ayurveda's bid for Ruchi Soya, an edible oil manufacturer, which owes over Rs 12,000 crore to financial and operational creditors, under the Insolvency and Bankruptcy Code (IBC). Earlier, the committee of creditors, a group of financial creditors, had approved the resolution plan of Patanjali Ayurveda by a vote share of 96.95 per cent.
According to the resolution plan, Ramdev-owned Patanjali will infuse Rs 4,350 crore in a special purpose vehicle formed for the purpose and the same would later be merged with Ruchi Soya. Out of Rs 4,350 crore, a sum of Rs 4,235 crore will go into paying different classes of creditors, and the remaining Rs 115 crore will be used for improvising operations of Ruchi Soya.
Standard Chartered and DBS, two financial creditors which started the insolvency proceedings against Ruchi Soya, together put a claim of close to Rs 700 crore. The company owed money to 16 other banks. Of Rs 4,250 crore earmarked for the repayment of creditors' dues, Rs 4053 crore will be paid to secured financial creditors against their claim of Rs 8,377 crore, taking a haircut of 52 per cent. A sum of Rs 40 crore has been set aside for payment of unsecured financial creditors against their claim of Rs 1,007 crore.
Operational creditors will receive a maximum of Rs 90 crore against their claims of Rs 2,716 crore. As per the plan, operational creditors, who are unrelated party and not connected with persons of the debtor and its existing promoters, will be paid a maximum of Rs 90 crore or they will receive the liquidation value allocated for operational creditors, whichever is higher, on a pro-rata basis.
The Rs 4,350 crore plan does not include the cost of resolution plan, which the resolution professional is yet to submit. Adani Wilmer, which was the highest bidder for Ruchi Soya with an offer of Rs 5,500 core, pulled out of the race citing delays in the process. The insolvency application of Ruchi Soya was admitted by NCLT on December 15, 2017, and the resolution plan was approved on July 24, 2019, well past the 270-day deadline prescribed in the IBC. It will take another 75 days to fully close the process.