Ruchi Soya Industries said global private equity player Devonshire Capital will buy 51% of the company and 100% of certain of its ‘branded packaged oils distribution business’.
The money will be substantially utilized for payment to all lenders over a period of time, it said.
Devonshire will pay Rs 4,000 cr for the branded packaged oils distribution business.
In addition, it will invest more money to take a 51% controlling stake in Ruchi Soya Industries, which is a listed entity in India.
This will include issue of fresh equity by the company, the food company said.
“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,” said Managing Director & CEO Dinesh Shahra.
The branded packaged oils distribution business will be spun out before being acquired by Devonshire for Rs 4,000 cr. The amount will be paid to Ruchi Soya in various tranches.
The deal will require the approval of all lenders, in addition to regulatory formalities.
Devonshire Capital is a privately owned independent Asian based merchant banking organization spread throughout the Asia Pacific region.
The Devonshire Group is focused on investing in companies focused on consumer led businesses and with a strong market share.
Since 1995, Devonshire Capital has mobilized a combined investment value of over $10 billion in cross border transactions with a primary focus on Asia.
Devonshire Capital’s major deals include advising ING Bank in a US$800 million acquisition of one of Thailand’s largest banks, TMB Bank and acquiring Low Carbon Investors, an AIM quoted investment fund.
Ruchi Soya is India’s leading Agri and Food FMCG Company with a turnover of USD 3 billion.
It enjoys leadership position in soy foods category in India and is one of India’s largest players in the cooking oils segment of the country.
Its brands include Nutrela, Mahakosh, Sunrich, Ruchi Gold and Ruchi Star.
It is also among the pioneers of oil palm plantations in India and one of the highest exporters of value added soybean products like soy meal, textured soy protein and soy lecithin.
Ruchi Soya has also diversified into renewable energy.
The company has been under a heavy debt load.