 "Care Ratings downgrades Ramdev's Patanjali on Ruchi Soya acquisition")
Indian credit ratings company has cut Patanjali Ayurved Ltd. by two levels, citing a likely weakening of its financial position as it partly funds a merger with a maker of soya products.
Care Ratings Ltd. downgraded Patanjali’s long-term bank facilities to A- from A+, according to a statement on Friday. Care and Brickwork Ratings cut the company’s outlook to negative from stable.
Patanjali Consortium Adhigrahan Pvt.— a venture by Patanjali Ayurved and three other companies controlled by yoga guru Baba Ramdev — is taking over Ruchi Soya Industries Ltd. for Rs 43.5 billion ($614 million).
Care said the revision in the ratings takes into account the “expected weakening of its financial risk profile on account of large outflow of funds from Patanjali Ayurved to Patanjali Consortium Adhigrahan.”
India’s company court approved a bid by Patanjali Consortium last month to take over Ruchi Soya. Creditors of the cooking oil producer are set to receive a maximum of Rs 42.4 billion in repayments, a 65% haircut to their verified claims of about Rs 121 billion.
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