Reliance Naval and Engineering to cancel shares of existing shareholders
The Monitoring Committee overseeing the implementation of Swan Energy’s resolution plan for Reliance Naval and Engineering Ltd has proposed to cancel and extinguish all the presently outstanding ordinary equity shares being held by the existing shareholders. The company will issue one fresh equity share of face value Rs. 10 to each existing shareholder for every 275 ordinary equity shares held by such shareholder.
Any fractional shares shall be held in trust and dealt with in accordance with the relevant provisions of law, the monitoring committee informed the exchanges.
Thus, the 73,75,91,263 existing equity shares of face value Rs. 10 each will become 26,82,150 ordinary equity shares of Rs. 10 each.
The special purpose vehicle — Hazel Infra Limited (HIL) – will soon thereafter but not later than 30 days from the closing date, subscribe to 5,00,00,000 fresh ordinary equity shares of face value of Rs. 10 each. Thus, the SPV shall be a shareholder of Reliance Naval and Engineering Ltd to the extent of holding 5,00,00,000 ordinary equity shares of Rs. 10 each.
Swan Energy Limited (SEL) is a strategic partner with HML through a special purpose vehicle — Hazel Infra Limited (HIL).
The resolution plan
Swan Energy’s Rs 2,108 crore resolution plan for Reliance Naval and Engineering include a payment of Rs 2,040 crore to secured financial creditors and Rs 3 crore to operational creditors.
There’s no provision of payments to unsecured financial creditors, who had filed claims of Rs 31,860 crore. The resolution plan also includes a payment of Rs 65 crore as CIRP cost.
Apart from raising Rs 1,808 crore from operations of Reliance Naval and Engineering, the new promoters will infuse Rs 600 crore and borrow another Rs 550 crore. The surplus amount after paying for creditors and CIRP cost will be used for working capital and Capex.
The insolvency process of Reliance Naval and Engineering (RNAVAL) began on January 15, 2020, when the National Company Law Tribunal (NCLT) admitted an application by IDBI Bank for the initiation of corporate insolvency resolution process (CIRP) against the company. The company had defaulted on a payment of Rs 1,160 crore due to IDBI Bank.
In December 2022, the NCLT approved the resolution plan submitted by Swan Energy led Hazel Infra Limited.
Also Read: NCLT approves Swan Energy’s Rs 2,108 crore resolution plan for Reliance Naval and Engineering
