Swan Energy pays Rs 50 Crore for Reliance Naval acquisition

Swan Energy Ltd has confirmed the release of an upfront payment of Rs 50 crore for the acquisition of Reliance Naval & Engineering (RNEL), in accordance with the approved resolution plan. The National Company Law Tribunal's Ahmedabad Bench had previously directed Swan Energy to make this payment. The resolution plan, led by the Hazel Mercantile consortium, was approved in December 2022, valuing RNEL at Rs 2,100 crore. 

Jindal Steel and Power and Reliance Infrastructure had submitted similar proposals, but they were rejected by the NCLT. The company has since been renamed Swan Heavy Industries Ltd. The approved resolution plan entails Swan Energy making an upfront payment of Rs 293 crore to RNEL's lenders by March 23, 2023. 

However, this deadline was extended to July 23, 2023, due to fund allocation challenges. After failing to meet this extended deadline, Swan Energy sought a second extension, which ended on September 14. In light of the NCLT's directive on October 5, the company has now released Rs 50 crore towards the proposed resolution plan. This development marks a significant milestone in the lengthy resolution process initiated 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.