Ruchi Soya Industries spikes 19% on deal to sell 51% stake to PE firm

Moneycontrol News

Ruchi Soya Industries share price rallied as much as 19 percent on Thursday after the company signed binding term sheet for selling 51 percent stake to private equity investor.

"....in its meeting held today, the board of directors has approved signing of a binding term sheet with Devonshire Capital, a global private equity major for investment in Ruchi Soya Industries (RSIL) via acquisition of a majority stake including issue of fresh equity," the company said in its filing.

The board also approved the filing of a petition under section 230 of the Companies Act, 2013 in the NCLT (National Company Law Tribunal) to enter into a scheme of arrangement subject to applicable approvals.

As per the binding term sheet, Devonshire Capital is taking 51 percent equity stake in RSIL as per SEBI guidelines post approval from the creditors and other statutory/regulatory approvals.

"It also covers restructuring of RSIL's certain branded packaged oils distribution business being spun out and to be 100 percent acquired by the investor for a gross consideration amount of Rs 4,000 crore to be paid to RSIL in various tranches," the company said.

The amount would be substantially utilised for payment to all lenders over the period of time as described in the scheme of arrangement.

Commenting on the restructuring, Managing Director & CEO, Dinesh Shahra 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."

At 14:55 hours IST, the stock price was quoting at Rs 30.75, up Rs 2.45, or 8.66 percent amid high volumes on the BSE.