NEW DELHI: FMCG major Ruchi Soya (RSIL) has announced that it will offload a majority stake to global private equity firm Devonshire Capital. According to the company’s statement on Thursday, the board of directors has given the go ahead for the agreement, which will see Devonshire acquire a 51 per cent stake in RSIL, while also investing around Rs 4,000 crore for complete acquisition of RSIL’s branded packaged oils business.
“This strategic investment by Devonshire will enhance the value of our business and provide an effective solution to resolve our outstanding issues with the banks, financial institutions and operational creditors. We are optimistic on an early completion of this restructuring exercise after all necessary approvals of the lenders and legal formalities,” managing director and CEO, Dinesh Shahra said.
The binding term sheet that is set to be signed with Devonshire stipulates that the acquisition of the majority stake will include an issue of fresh equity. The board has also approved the filing of a petition in the NCLT to enter into a scheme of arrangement subject to applicable approvals. Ruchi Soya is one of the 28 companies in the Reserve Bank of India’s second defaulter list for bankruptcy proceedings under the Insolvency and Bankruptcy Code.
The deal also covers the restructuring of Ruchi Soyas’s branded packaged oils distribution business “being spun out and to be 100 per cent acquired by the investor for a gross consideration amount of Rs 4,000 crore to be paid to RSIL in various tranches”, said the firm. The company will use the amount garnered for payment to all lenders over the period of time as described in the Scheme of Arrangement.
Devonshire Capital is a privately owned independent Asia-based merchant banking organisation and has mobilised a combined investment value of over $10 billion in cross border transactions with a primary focus on Asia.