Lenders may do Swiss auction for Ruchi Soya as Adani, Patanjali compete

The CoC on Ruchi Soya have been discussing the finalisation of sale this week.

 Race for Ruchi Soya: Patanjali Ayurveda emerges highest bidder

Sources suggest that in a tough bid environment, lenders are deliberating a Swiss auction bid process for the sale of Indore-based edible oil firm.

This could be path-breaking in the cases related to Insolvency and Bankruptcy Code (IBC), since no other case have used this mechanism for the sale process.

"Value maximization is the key for the lenders and Swiss auction process will bring out the best value," a source with direct knowledge said.

Under the Swiss auction method, the CoC will proclaim a front runner and open the bid for other eligible aspirants to give a counter offer.

The front runner will have the option to match the highest bid.

In case of Ruchi Soya, besides Adani Wilmar, Patanjali Ayurveda, sources suggest that Emami Group may also be allowed to participate in the Swiss bid process.

Banks like IDBI, ICICI Bank, SBI, Standard Chartered, DBS are the big lenders to Ruchi Soya.

An expert in IBC cases said, "There could be more IBC cases under Swiss auction route if Ruchi Soya’s case is a success."

"While IBC related sale processes are the biggest mergers and acquisitions drivers this year, resolution is slow due to various hiccups and legal tangles between the bidders. There are new learnings from each of the cases and as the process is still evolving, each new case may set a new precedent for the future sale processes,” he said.

Ruchi Soya, facing the insolvency proceedings, has a total debt of about Rs 12,000 crore.

The company has many manufacturing plants and its leading brands include Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold.