Home > companies > news > Godrej Agrovet eyes palm oil business, may join race to acquire Ruchi Soya

Mumbai: Godrej Agrovet Ltd plans to bid for Ruchi Soya Industries Ltd, which is undergoing bankruptcy resolution, with an eye on its palm oil business, a person with direct knowledge of the matter said. Since Godrej is not interested in Ruchi Soya’s other businesses, it may tie up with others keen on those businesses, this person said on condition of anonymity.

To be sure, Godrej Agrovet is yet to formally approach Indore-based Ruchi Soya, India’s largest edible oil maker.

A bid would mark Godrej joining the race for Ruchi Soya, in which companies such as Patanjali Ayurved Ltd, ITC Ltd and Emami Ltd have evinced interest, BusinessLine reported on Friday.

According to the report, the company, which is currently undergoing bankruptcy proceedings, has received as many as 26 applications from Indian and foreign conglomerates to acquire a 51% stake.

“They have some beautiful assets. We want to buy their oil palm business. The problem is we cannot just bid for one part of the business," said the person cited above.

“We would like to see if some other companies can also come together to bid for their assets," the person said.

Responding to queries from Mint, Balram Singh Yadav, managing director, Godrej Agrovet, said his company continues to explore growth opportunities.

“Godrej Agrovet is a diversified, research and development focused agri-business company, dedicated to improving the productivity of Indian farmers by innovating products and services that sustainably increase crop and livestock yields. We continuously explore growth opportunities at an appropriate valuation," Yadav said.

Ruchi Soya is also India’s largest company in oil seed extraction, with a capacity of 3.72 million tonnes per annum capacity. As of 31 December, it had a debt of around Rs12,000 crore. The company sells brands such as Nutrela, Mahakosh, Sunrich, Ruchi Gold and Ruchi Star.

Ruchi Soya is also the biggest exporter of soya meal, lecithin and other food ingredients from India.

In December 2017, NCLT’s Mumbai bench admitted Ruchi Soya’s insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, following petitions by Standard Chartered Bank and DBS Bank.

Ruchi Soya is among the 26 companies on the second list of bad loan accounts that the Reserve Bank of India sent to banks last year asking them to conclude a debt resolution.

Ruchi Soya’s promoters—the Shahra family, and companies owned by them—hold 54.85% in the company. Of this, Soyumm Marketing Pvt. Ltd is the largest shareholder with a 13.66% stake. Managing director and CEO Dinesh Shahra owns 0.63% as an individual shareholder and an additional 9.74% on behalf of two separate trusts.

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