Swan Energy to take over Reliance Naval and Engineering Limited
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Close on the heels of making the balance upfront payment of Rs. 231.42 crore, Swan Energy Limited (SEL), has initiated the formal process of taking over Reliance Naval and Engineering Limited (RNEL). As the first step, SEL will set up a Board of Directors once the Monitoring Committee appointed by the NCLT gets dissolved. SEL will kick start operations as soon as the takeover process is completed.
SEL through its SPV Hazel Infra Limited, has made the payment of Rs.231.42 crore on 27th October, 2023 towards the upfront payment obligations of RNEL.
With this acquisition, Swan Energy Limited has firmed up its plan to emerge as the biggest private player in the commercial and naval defence vessel manufacturing and ship repairing segments. Apart from targeting major contracts from the naval defence sector, the company is also focusing on driving business for commercial vessel manufacturing and for the oil and gas sector.
Paresh Merchant, Promoter, Swan Energy Group said, "The acquisition of RNEL will catapult SEL into the big league of oil, gas and chemicals, ports and defence and shipyards. We believe RNEL will be a potent combination of an excellent asset base with huge potential for growth. As India strengthens its focus on indigenizing its defence manufacturing and supply chain through Atmanirbhar Bharat, we are now well positioned to leverage the emerging opportunities. We aim to emerge as the biggest private player in the manufacturing of naval defence, commercial vessel manufacturing and oil and gas sector".
"SEL has the largest dry dock in India. And there's enough available area to almost double the whole set up and make it the best engineering canter in India,” said an industry expert. The versatility of the asset, according to him, is in addition to taking up ship repair work or oil and gas vessel work.
“Other than L&T’s Kattupalli Shipyard, there are no other private yards in the country. >From 2014 to 2020, not many naval defence contracts have been awarded. But now, as India looks to become a major defence manufacturing hub, we expect orders to start coming in,” added that industry expert.
Oil and gas, defence and heavy manufacturing businesses will be the major focus areas for SEL. SEL plans to enhance the shipyard manufacturing capacity to play a part in taking India among the top five countries of the world in heavy fabrication such as naval, defence or oil and gas and bridge the current demand-supply gap.
The National Company Law Tribunal (NCLT) has already approved a~Rs 2,100-crore bid for RNEL under the Corporate Insolvency Resolution Process (CIRP) made by Hazel Infra Ltd (HIL); which is an SPV of Swan Energy (74%) and Hazel Mercantile Ltd (26%). The balance upfront payment of Rs.231.42 crore by HIL completes the upfront payment obligation as laid down in the approved Resolution Plan.
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