Patanjali Ayurved has deposited its equity portion in a State Bank of India (SBI) escrow account, in what is the final step before it completes payments for the acquisition of edible oil maker Ruchi Soya. The company had to infuse Rs 1,150 crore equity of the Rs 4,350 crore it is paying for the acquisition. The remaining money will be paid through bank loans. “We have deposited the entire equity portion as per resolution plan,” Patanjali spokesperson SK Tijarawala told ET.
Bankers said the extension in deadline was precautionary in nature as the company wanted to make sure that it does not fall foul of the law. “We have now received the equity portion which the company will infuse and the rest the company has already tied up with banks. We expect this deal to be closed tomorrow (Wednesday),” said a person familiar with the transaction.
Pantanjali will infuse Rs 1,150 crore equity in a special purpose vehicle (SPV) ‘Patanjali Consortium Adhigrahan Pvt Ltd’, which will be later amalgamated with Ruchi Soya, according to the resolution. Out of equity infusion Rs 450 crore is through preference shares, Rs 450 crore through non-convertible debentures subscribed by some banks, and Rs 200 crore from the company’s internal accruals. “There was a shortfall of about Rs 322 crore from the preference issue and the NCD which the company got sanctioned from the public sector bank on Tuesday, which is how the deal could go through,” said a second person familiar with the transaction. The rest of the Rs 3,200 crore for the transaction is to be funded from loans from a consortium of lenders.
Source: Economic Times