Patanjali acquires Indian food company Ruchi Soya

Indian consumer goods company Patanjali Ayurved has acquired debt-ridden food company Ruchi Soya reportedly under the Insolvency and Bankruptcy Code.

Patanjali had its acquisition proposal approved in July.

As part of the deal, Patanjali has repaid Rs41.1bn ($577m) to the lenders of Ruchi Soya to acquire the company. This comes after Ruchi Soya’s creditors claimed Rs93.8bn ($1.3bn).

It has completed the transfer of debt and the equity portion to an account with the State Bank of India (SBI).

The bank will distribute this to all of the lenders in the consortium. It expects some of the key lenders to recover 45% of their dues.

Patanjali collaborated with SBI, Punjab National Bank (PNB), Union Bank of India, Syndicate Bank and Allahabad Bank to fund the acquisition.

Ruchi Soya has its headquarters in the Indian state of Madhya Pradesh. It produces a wide range of food, edible oils and other products such as soya and bakery fats.

The company owns soya foods brand Nutrela, which is reportedly one of the largest selling brands in India and has more than 50% of the market share.

In June 2018, Adani Wilmar offered to purchase Ruchi Soya for a sum of more than Rs60bn ($756m), making the company the new highest bidder for the acquisition of the debt-ridden soya foods manufacturer.

Adani Wilmar is a joint venture (JV) between India-based Adani Group and Singapore-based Wilmar. The Economic Times reported that its proposal followed Patanjali’s offer of more than Rs57bn ($718m).