Care Ratings Ltd. downgraded Patanjali’s long-term bank facilities to A- from A+, according to a statement on Friday. Care and Brickwork Ratings cut the company’s outlook to negative from stable.
An Indian credit rating company cut Patanjali Ayurved Ltd. by two levels, citing a likely weakening of its financial position as it partly funds a merger with a maker of soya products. Care Ratings Ltd. downgraded Patanjali’s long-term bank facilities to A- from A+, according to a statement on Friday. Care and Brickwork Ratings cut the company’s outlook to negative from stable.
Patanjali Consortium Adhigrahan Pvt. — a venture by Patanjali Ayurved and three other companies controlled by yoga guru Baba Ramdev — is taking over Ruchi Soya Industries Ltd. for 43.5 billion rupees ($614 million).
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Care said the revision in the ratings takes into account the “expected weakening of its financial risk profile on account of a large outflow of funds from Patanjali Ayurved to Patanjali Consortium Adhigrahan.”
India’s company court approved a bid by Patanjali Consortium last month to take over Ruchi Soya. Creditors of the cooking oil producer are set to receive a maximum of 42.4 billion rupees in repayments, a 65% haircut to their verified claims of about 121 billion rupees.