Swan Energy makes Rs 50 cr upfront payment to Reliance Naval and Engineering lenders

The successful resolution applicant Swan Energy has made an upfront payment of Rs 50 crore to the lenders of Reliance Naval and Engineering Limited as a precondition for extension of timeline for upfront payment resolution amount. Swan Energy in a march filing to NCLT has sought extension of time by four months to make the upfront payment.

Earlier, in the tribunal, Swan Energy had submitted that considering the funds are being raised from single source, it is not possible to raise funds in instalment as the entire investment will be available with them at one go. And hence it has sought additional time for the making the payment. The lenders of Reliance Naval had agreed to extend the timeline on the condition a part of the payment is made upfront.

Swan Energy Limited (SEL) is a strategic partner of Resolution Applicant — Hazel Mercantile Limited (HML), through a Special Purpose Vehicle (SPV), namely Hazel Infra Limited (HIL), to acquire Reliance Naval and Engineering.

According to the resolution plan, Swan Energy will pay the creditors of Reliance Naval Ltd an amount of Rs 2,108 crore including the CIRP cost of Rs. 65.31 crore. The creditors of Reliance Naval and Engineering Ltd had submitted total claims of Rs 46,441 crore, of which the resolution professional had submitted only Rs 12,884 crore. The average liquidation value of Reliance Naval and Engineering was arrived at Rs 1,352 crore.

Apart from raising Rs 1,808 crore from operations of Reliance Naval, 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.

It is further submitted by the successful bidders that the resolution plan which clearly states that the successful Resolution Applicant shall ensure that payment is made to the stakeholders even if the internal accruals fall short of the targets.

Also See: NCLT approves Swan Energy’s Rs 2,108 crore resolution plan for Reliance Naval and Engineering