Ruchi Soya sets up panel to explore restructuring options

RUCHI SOYA’S TOTAL BORROWINGS STOOD AT ₹12,232.22 CRORE FOR 201617, ALMOST 12 TIMES THE COMPANY’S EQUITY, AS PER THE LATEST ANNUAL REPORT.

The board of edible oil maker Ruchi Soya Industries Ltd has set up a committee to explore corporate restructuring options, the company said in a statement. Ruchi Soya said it is considering internal restructuring options including creating subsidiaries for individual businesses within the firm, and separating businesses into individual entities.

Ruchi Soya’s primary lines of business include selling packaged edible oils and soyabean chunks, oilseed extraction, edible oil refining, and wind power generation. In FY16-17, 74% of revenue came from its edible oils business, according to its latest annual report.

“The primary aim of undertaking this exercise is to unlock value of our diverse businesses,” managing director Dinesh Shahra said in the note. “This process would allow the management to focus on the respective businesses with flexibility in fund raising for future growth and expansion.”

Ruchi Soya expects its individual business verticals will look for investors and business partnerships, the company said in the statement.

The move comes at a time when Ruchi Soya’s bankers are struggling to recover money from the debt-laden firm.

In February, an unsecured lender had served an insolvency and bankruptcy notice to the firm for loans worth ₹6.93 crore.

This came even as Ruchi Soya successfully fought off a winding up petition filed by IDBI Bank Ltd against the firm to recover loans worth ₹200 crore. IDBI Bank is the leader of a consortium of banks which have lent to Ruchi Soya.

“This exercise will help Ruchi Soya to successfully overcome issues that have developed over a period of time largely due to macroeconomic conditions much beyond the control of the company,” Shahra said.

“The unlocking of value through this restructuring will help come up with a timely and effective solution to resolve our outstanding issues benefiting all our stakeholders including banks and financial institutions.”

Ruchi Soya is part of a list of 28 defaulters RBI sent to banks, asking them to conclude a debt resolution process by December 13 this year, Mint reported on Tuesday.