RUCHI SOYA - PATANJALI vs ADANI

BASICS

'RUCHI SOYA' : is India's largest manufacturer of edible oil.  

But, Currently 'RUCHI SOYA' is in DEBT. 

They owned around Rs 12000 crore debt from financial creditors, including Rs 1822 crore to State Bank of India also from others banks like Standard Chartered and DBS Bank.

But profits are not large.

Now, Ruchi Soya lenders wants that some other company acquire Ruchi Soya so that they get their money back.

 Image result for ruchi soya patanjali vs adani

 CURRENT MARKET SHARE

 If we look at the Market Share in Edible Oil. 'Adani Wilmar' is on Top around 19% market share and Ruchi Soya on 2nd Position i.e. 14%.

 Image result for EDIBLE OIL SHARES ADANI RUCHI SOYA

 Here, Adani Wilmar wants to acquire Ruchi Soya so that they became big in edible oil market.

 But Patanjali group also wants to acquire the Ruchi Soya and wants to come on 2nd Position.  Currently Patanjali is not in top list (They have not a big market share in Edible Oil).

 'Adani Wilmar' is one of the part of the 'Adani group'. The below brands of edible oil shown in image belongs to 'ADANI WILMAR' . Chairman of group is 'Gautam Adani'

 Image result for adani wilmar 

Gautm Adani Image:

Image result for gautam adani


NATIONAL COMPANY LAW TRIBUNAL (NCLT) :  

It is a quasi-Judicial body in India that adjudicates issues relating to Indian companies.

 If any company unable to pay its debt, so,if we dissolve that company under insolvency bank court, Then NCLT came in picture at that time.

 NCLT built in June 2016

 So, currently under NCLT a process is going on to acquire the Ruchi Soya. Various companies invited and told the if any one wants to acquire Ruchi Soya then they can acquire it.

 NCLT here trying to decide the lenders who gave debt to Ruchi Soya can get their money back.

 THE FIGHT

When NCLT decide to sell Ruchi Soya - so primarily two companies came front to acquire it :
  • ADANI WILMAR  - Gautam Adani
  • PATANJALI - Baba Ramdev
Acquisition would give Adani Wilmar control of nearly one-third of the market , or boost Patanjali Ayurveda in its expansion plans.

 THE SELECTION - HOW IT WILL BE DECIDED WHO WILL ACQUIRE?

 Here, Ruchi Soya will not decide who will purchase, but their lenders will decide who will purchase.

 Adani Wilmar bid around Rs 6000 crore, as against Rs 5700 crore offered by Patanjali Ayurveda. A majority of the members of the Committee of Creditors (CoC) voted in favour of Adani Wilmar.

 But Here, only money will not play rule, Lenders also look at the Plans - and asked How you will revive this company what is plan with you.

 LEGAL SIDE

 So for Now, Patanjali put the Legal case.

Patanjali has argued that that Adani Wilmar promoters are ineligible to bid as per Section 29A of the Insolvency and Bankruptcy Code.

 As per the section, a resolution applicant is ineligible to submit a plan if connected to a person who meets any of the ineligible criteria.

 Problem is  Adani Wilmar Managing Director - 'Pranab Adani' has family relation with Vikarm Kothari -former promoter of Rotomac group, which has allegedly defaulted on nearly Rs 3700 crore bank loans .

 Since a defaulter's relatives are barred from bidding for companies undergoing corporate insolvency resolution, Patanjali has sought cancellation of the approval for the Adani Wilmar bid. 

Now again case is with Tribunal (NCLT) - Now, Tribunal will decide.

 DEADLINE

 The NCLT will continue to the hear the matter on September 7. So, Let's see who will WIN.

 For more information, you can access below links:

 https://indianexpress.com/article/explained/how-adani-won-ruchi-soya-why-patanjali-objects-5336462/

 https://www.financialexpress.com/industry/why-baba-ramdevs-patanjali-is-challenging-adani-wilmars-winning-bid-for-ruchi-soya/1300715/

 Above Information is as per data available in news till the date when I am posting this.
For Other Topics visit - http://learn2ogether.blogspot.com/ 

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