Adani Wilmar has emerged as the highest bidder to acquire the beleaguered Ruchi Soya, pipping Baba Ramdev-led Patanjali Ayurved in the ongoing insolvency process.
This, however, is not the end of the road for Patanjali, as it can raise its bid under the newly adopted Swiss Challenge bidding method. This is the first time lenders are using this method to maximise the bid amount.
According to sources close to the development, Patanjali will be given time till Wednesday to put in a higher bid.
On Tuesday, Adani Wilmar’s bid of about ₹6,000 crore gave the company the H1 status. This included ₹4,300 crore for repayment of loans and another ₹1,714 crore by way of capital infusion.
Patanjali’s bid stood at about ₹5,700 crore, of which ₹4,065 crore would be payable to the lenders and another ₹1,700 crore earmarked as capital infusion, sources privy to the development told BusinessLine .
The figures could not be independently verified from the companies, with spokespersons of all the concerned firms declining to comment ahead of an official announcement.
According to the sources, under the ongoing Swiss Challenge method — a mode of bidding where participants outbid the others and the highest bidder wins — Patanjali will get another chance to counter Adani Wilmar’s offer.
If it succeeds, Adani Wilmar will also be given a chance to revise its offer again.
Conflict of interest?
The entire process could be derailed if the Baba Ramdev company raises a “conflict of interest” issue to throw a spanner in Adani’s application.
Patanjali has asked the Committee of Creditors (CoC) to give details of the appointment of law firm Cyril Amarchand Mangaldas as legal adviser to Ruchi Soya’s Insolvency Resolution Professional (IRP). The law firm was also advising Adani Wilmar simultaneously.
Though Cyril Amarchand is understood to have subsequently resigned as advisor to Adani Wilmar, Patanjali may raise the red flag as the exit happened after the resolution process started. Sources close to the Adani camp said that since the law firm had exited before the bids were opened, there is no case of conflict of interest.
As of December 31, 2017, Ruchi Soya’s debt stood at about ₹12,000 crore. It is India’s largest edible oilseed extraction and refining company, with a capacity of 3.72 mtpa.
It is also the largest player in the cooking oil and soya foods category in the country. Its brands include Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold.
Other cases
In another development, the National Company Law Tribunal has directed the resolution professional of Alok Industries to resubmit the plan submitted by JM Financial Asset Reconstruction and Reliance Industries to the CoC for reconsideration.
In the case related to the resolution of Bhushan Power, the National Company Law Appellate Tribunal will take a call on July 23 on whether to give the asset to Tata Steel or to Liberty House.
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