BASICS

• A fast-growing market for packaged edible oil is seeing

two companies battle it out to acquire debt-laden
edible oils and foods company Ruchi Soya Industries
Ltd.

• Lenders will take a lower haircut than expected, adding

to cases where the insolvency process has extracted
value.
LOT OF MONEY
ADANI WILMAR
RUCHI SOYA
 COMPANY IN DEBT
Ruchi Soya owes around Rs 12,000 crore to financial and
operational creditors, including Rs 1,822 crore to State Bank of
India. The NCLT admitted the company for a corporate insolvency
resolution process in December, after initiation by financial creditors
Standard Chartered Bank and DBS Bank.

Ruchi Soya would be an important acquisition for bidders seeking

control of the edible oils market, with its major brands including
Nutrela soya foods, Mahakosh soyabean oil and Sunrich
sunflower oil. Acquisition would give Adani Wilmar control of
nearly one-third of the market, or boost Patanjali Ayurveda in its
expansion plans.
 NATIONAL COMPANY LAW
TRIBUNAL
• The National Company Law Tribunal (NCLT) is a quasi-judicial body
in India that adjudicates issues relating to Indian companies.

• The NCLT was established under the Companies Act 2013 and was
constituted on 1 June 2016 by the government of India & is based on the
recommendation of the justice Eradi committee on law relating to
insolvency and winding up of companies.

• National Company Law Tribunal (NCLT) for corporate and Debt Recovery
Tribunal (DRT) for individuals
 THE FIGHT
Acquisition would give Adani Wilmar control of
nearly one-third of the market, or boost Patanjali
Ayurveda in its expansion plans.
 THE SELECTION
The bidder was selected through the Swiss Challenge method,
approved by lenders and resolution applicants, with both Adani
Wilmar and Patanjali Ayurveda given an opportunity to revise
their resolution plans.

Adani Wilmar bid around Rs 6,000 crore, as against Rs 5,700

crore offered by Patanjali Ayurveda, it is learnt. A majority of the
members of the Committee of Creditors (CoC) voted in favour
of Adani Wilmar.
 THE LEGAL SIDE
Patanjali has argued that the Adani Wilmar promoters are ineligible to bid as
per Section 29A of the Insolvency and Bankruptcy Code. As per this section,
a resolution applicant is ineligible to submit a plan if connected to a person
who meets any of the ineligibility criteria.

Patanjali is understood to have argued that Adani Wilmar managing director

Pranav Adani is related to Vikram Kothari, former promoter of Rotomac
group, which has allegedly defaulted on nearly Rs 3,700 crore in 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.
 DEADLINE SOON
The NCLT will continue to the hear the
matter on September 7. The 270-day
deadline for the debt resolution under the
Code, meanwhile, is due to end on
September 12.
 UPSC PERSPECTIVE
Mains paper - 3

Food processing and related industries in India-

scope and significance, location, upstream and
downstream requirements, supply chain
management