Swan Energy to delay upfront payment for Reliance Naval and Engineering

Swan Energy Limited (SEL), the successful resolution applicant for Reliance Naval and Engineering Ltd, has sought more time for the upfront payment as per the resolution plan.

In an exchange filing recently, Swan Energy said that it has sought extension of time by four months from NCLT to make the upfront payment. Swan Energy in its plea at NCLT has said that the recent events following the Hindenburg expose on Adani group companies have disturbed the capital markets and have caused a major obstruction in raising any funds.

“This turbulence has been caused due to several reasons, including a report published by a foreign hedge fund containing allegations against a certain Indian conglomerate, which has led to an unprecedented deterioration in market capitalisation,” it said in the NCLT

These events, according to Swan Energy, have been thwarting it to raise the necessary funds to make the upfront payment.

The Ahmedabad bench of the NCLT after hearing the company’s plea has directed it to pay Rs 10 crore to the Committee of Creditors (CoC) within 7 days, and restrained the CoC to take any coercive action against the successful resolution applicant. It has directed the CoC to respond within 14 days. The tribunal will hear the matter next on 17 April 2023.

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 Ltd.

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.

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