Companies

With NCLT nod for ₹4,350-cr resolution plan, Patanjali gets control of Ruchi Soya

Forum Gandhi / Rajesh Kurup Mumbai | Updated on July 25, 2019 Published on July 25, 2019

The National Company Law Tribunal’s (NCLT) Mumbai Bench has approved Baba Ramdev-led Patanjali Ayurved’s ₹4,350-crore resolution plan for debt-ridden edible oil firm Ruchi Soya, which was kept in abeyance earlier.

In its order dated July 24, the bankruptcy tribunal approved the plan, subject to certain conditions and modifications including filing of affidavits showing the source of funds and details of the Corporate Insolvency Resolution Process (CIRP) cost. These have to be submitted before the next hearing on August 1.

The tribunal is seeking clarity on source of funds of about ₹600 crore which was part of the bid amount.

“…we approve the resolution plan with modifications, as mentioned above, which shall be binding on the corporate debtor and its employees, members, creditors, guarantors, resolution applicant and other stakeholders involved in the resolution plan,” NCLT said in its order.

Under the resolution plan, a total of ₹4,235 crore has to be infused to settle creditors’ and stakeholders’ dues and the remaining ₹115 crore is to be infused as equity to improve the company’s operations, NCLT bench of VP Singh and Ravikumar Duraisamy said in their order.

The resolution plan was earlier approved by the Committee of Creditors with a 96.85 per cent voting share.

The total verified claims were at ₹12,146.13 crore of which a payment of ₹4,235 crore was proposed.

Shailendra Ajmera of consultancy firm EY was the resolution professional to Ruchi Soya case.

On July 9, NCLT had directed Ruchi Soya’s resolution professional to confirm whether an earlier National Company Law Appellate Tribunal’s (NCLAT) order Essar Steel-ArcelorMittal case would have an impact on this case. In the ArcelorMittal case, the appellate tribunal has passed an order that equal treatment to both operational and financial creditors, a move that would result in higher haircut by banks. However, the NCLT has taken a view that the Essar Steel order has no bearing on this case.

Published on July 25, 2019
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