NCLT asks Swan Energy to make upfront payment for Reliance Naval

The National Company Law Tribunal (NCLT) has asked Swan Energy to make upfront payment as per the resolution plan for Reliance Naval and Engineering Ltd (RNEL). Swan is supposed to make an upfront payment of around ₹250 core as proposed in the resolution plan, but has not deposited the money even after the extended deadline ended on September 14.

The company has once again approached the NCLT seeking another extension of two months.

The NCLT Ahemdabad heard Swan Energy’s plea on October 5 and directed the company to make the payment as proposed in the resolution plan, before it could consider its application for a third extension.

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The next hearing is scheduled for November 22 in the matter.

Payment extensions

As per the resolution plan approved by the NCLT Ahmedabad, the Swan Energy was to make an upfront payment of ₹293 crore to the lenders of RNEL by March 23, 2023, but on Swan’s plea this deadline was further extended to July 23, 2023.

As the company failed to arrange funds for making the upfront payment within the extended deadline, then it again approached the NCLT Ahmedabad to seek second extension.

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On August 1, NCLT granted Swan a second extension of 45 days, which ended on September 14.

Swan Energy, along with Hazel Mercantile, was the successful resolution applicant for Reliance Naval’s shipyard in Gujarat. Their resolution plan of ₹ 2,133 crore was approved by the NCLT in December 2022.

The consortium has so far paid around ₹ 50 crore on the directions of the NCLT to keep the RNEL as going concern.

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