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Bankruptcy resolution process: Godrej Agrovet plans to acquire Ruchi Soya

Ruchi Soya ventured into the palm business through contract farming on a large scale

Dilip Kumar Jha  |  Mumbai 

Godrej Agrovet bets on Astec, innovation to improve topline

(GAVL), a diversified agri-business company, has submitted its intent to acquire Ruchi Soya, the firm going through a

GAVL is among more than 24 that have submitted their bids for acquiring a majority stake in These companies, according to sources, include Patanjali Ayurved, ITC, Emami, and

Confirming the development, Balram Yadav, managing director, GAVL, said: “We have taken the first step and submitted our intent for acquiring We have a long way to go.”

Sources said GAVL might be interested in acquiring the entire business of But its chief interest is Ruchi Soya’s palm plantation business, which has synergies with GAVL’s businesses, in addition to forward and backward integrations.

“Our debt stands at just 0.15 per cent of equity, and we are in a comfortable position to raise funds from financial institutions. But we will have to look at other avenues, considering the large ticket size for this acquisition,” said a source.

Ruchi Soya ventured into the palm business through contract farming on a large scale, following a strategy of backward integration. The company has acquired and developed oil palm plantations in Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, Chhattisgarh, Gujarat, Arunachal Pradesh, and Mizoram. In these nine states, plantations cover a potential area of around 200,000 hectares (ha).

With an annual capacity of 3.72 million tonnes per annum, Ruchi Soya is India’s largest company in oil seed extractions. The company has debts of ~120 billion as of December 31, 2017.

Its edible oils and other FMCG brands are Sunrich, Mahakosh, Nutrela, Ruchi Star, and Ruchi Gold.

GAVL is the market leader in palm oil plantations in India with a market share of around 35 per cent. The company has around 61,700 ha under palm cultivation with products ranging from crude palm oil (CPO), palm kernel, and cake.

Meanwhile, the National Company Law Tribunal (NCLT), Mumbai, admitted Ruchi Soya’s in December last year, following petitions by the company’s lenders DBS Bank and Standard Chartered Bank.

The owned by the promoter family hold a 54.85 per cent stake in Ruchi Soya, with Soyumm Marketing Pvt Ltd having 13.66 per cent, the highest. The company’s chief executive officer, Dinesh Shahra, owns 0.63 per cent in his individual capacity. Additionally, he owns 9.74 per cent in the company through two separate trusts.

First Published: Wed, March 21 2018. 05:50 IST
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