In December 2022,the Swan Energy-led Hazel Mercantile consortium plan worth Rs 2,100-crore for Reliance Naval Defence & Engineering was approved by the Ahmedabad special bench of NCLT.
s wan Energy Ltd, which acquired erstwhile Anil Ambani group company Reliance Naval & Engineering (RNEL) in December 2022, has said that it has released Rs 50 crore payment towards upfront payment as proposed in the resolution plan. The National Company Law Tribunal's Ahmedabad Bench on Monday had asked Swan Energy to make the upfront payment for the procedure.
In December 2022, the Swan Energy-led Hazel Mercantile consortium plan worth Rs 2,100-crore for Reliance Naval Defence & Engineering was approved by the Ahmedabad special bench of NCLT. Similar proposals were tabled by Jindal Steel and Power and Reliance Infrastructure, but were rejected by the NCLT. The company was renamed Swan Heavy Industries Ltd.
As per the resolution plan approved by the NCLT, the Swan Energy was to make an upfront payment of Rs 293 crore to the lenders of RNEL by March 23, 2023. But Swan extended the deadline to July 23, 2023. But following this, the company again failed to arrange funds for making the upfront payment within the extended deadline. It again approached the NCLT Ahmedabad to seek second extension, which ended on September 14.
The NCLT bench on October 5 directed the company to make the payment as proposed in the resolution plan, before it could consider its application for a third extension.
After NCLT's order, Swan Energy released Rs 50 crore towards the proposed resolution plan. "As intimated earlier, Swan Energy Limited (SEL) is a strategic partner of Resolution Applicant, i.e., Hazel Mercantile Limited (HML), through a Special Purpose Vehicle (SPV), namely Hazel Infra Limited (HIL), to acquire RNEL. As per NCLT order dated 05-10-2023 in Interlocutory Application (I. A.) 1006 of 2023 for further extension of time, Rs 50 crore payment towards Upfront payment is being released today, i.e., 9th October, 2023 as agreed and consented to by the secured financial creditors," the company said in an exchange notification.
Led by businessman Nikhil Merchant and his family, Swan Energy partnered Hazel Mercantile Ltd through a special purpose vehicle - Hazel Infra Ltd - to acquire RNEL, the largest shipyard in the country. Swan Energy, a diversified business group with interests in oil and gas, real estate and textiles, holds a 74% stake in the SPV while Hazel Mercantile owns the rest.
RNEL, formerly Pipavav Shipyard, has a 720-metre seafront and 685-metre outfit quay, making it one of the largest dry docks in the world.
The shipyard originally had two wet basins – one approximately 680 m long and 65 m wide and the other about 680 m long and 60 m wide.
The first was subsequently converted into a dry dock 662 m long and 65 m wide. A dry dock is an area drained of water to allow the inspection and repair of a ship's hull.
The resolution plan was a significant development in the long-drawn saga of the resolution process of Reliance Naval, which began over three years ago to recover over Rs 12,429 crore owed to financial creditors including the State Bank of India and the Union Bank of India, among others.
According to the resolution plan approved by the NCLT in December, the company provides for the cancelation of all currently outstanding ordinary equity shares being held by the existing shareholders, subject to the issuance of one fresh equity share of the face value of Rs 10 for every 275 ordinary equity shares held by the existing shareholder. Thus, 73,75,91,263 existing equity shares of the face value of Rs 10 each will become 26,82,150 ordinary equity shares of Rs 10 each.
It is also provided that the special purpose vehicle Hazel Infra Ltd shall take over the corporate debtor and this SPV shall subscribe to 5,00,00,000 fresh ordinary equity shares of the face value of Rs 10 each.
Earlier, the company has sought a five-year period for the repayment of RNEL’s Rs 2,040 crore dues. Shares of Swan Energy were trading at Rs 293.45, up by 1.24 per cent, at 10.15 AM.
