New Delhi: Standard Chartered Bank and DBS Bank Ltd have initiated insolvency proceedings against edible oil maker Ruchi Soya Industries Ltd, the company said in two separate stock exchange filings on Friday.
The two foreign banks have filed petitions to begin the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code at the National Company Law Tribunal, the company said.
Debt-ridden Ruchi Soya was on a list of 28 defaulters the Reserve Bank of India had sent to banks, asking them to conclude their debt resolution process by 13 December.
Mint reported on 7 September that the company had announced it was setting up a panel to explore corporate restructuring options for its businesses, including oilseed extraction, edible oil refining, and wind power.
Ruchi Soya’s outstanding default payment to Standard Chartered worth Rs33.64 crore was due on 1 February, while payments worth Rs150.74 crore were due to DBS Bank on 6 March and 27 March.
The exposure of both the banks to Ruchi Soya is in external commercial borrowings, the company’s latest annual report shows. Ruchi Soya’s total debt as of FY16-17 was worth Rs12,232.22 crore, nearly 12 times its equity, as per the annual report.
Standard Chartered’s total loans to Ruchi Soya are secured by the windmills the company owns in Madhya Pradesh and Rajasthan, and by refineries in Kakinada, Andhra Pradesh, as per the annual report. DBS Bank’s loans are secured by Ruchi Soya’s fixed assets, including refineries in Kandla, Gujarat, and in Madhya Pradesh.
Ruchi Soya did not respond to emails and calls for a comment.
Shares of Ruchi Soya closed at Rs21.80 on Friday, down 0.68%, while the benchmark BSE Sensex closed up 0.1%. at 32,272.61 points.