Swan Energy subsidiaries Reliance Naval and Triumph Offshore to merge

Swan Energy on Friday announced that its subsidiaries, Reliance Naval and Engineering and Triumph Offshore, will merge. Under the proposed deal, Triumph Offshore will merge into Reliance Naval and Engineering.

Triumph Offshore is a wholly owned subsidiary of Swan Energy, while Reliance Naval is a step-down subsidiary. The scheme requires approval from the Ahmedabad bench of the National Company Law Tribunal (NCLT), stock exchanges, and the Securities and Exchange Board of India (SEBI), Swan Energy stated in a regulatory filing.

As part of the merger process, 1,325 redeemable preference shares of Reliance Naval and Engineering will be issued to shareholders of Triumph Offshore for every 1,000 shares they hold. Following the merger, Triumph Offshore will be dissolved without winding up. Notably, the shareholding pattern of Reliance Naval and Engineering will remain unchanged, as it is only issuing redeemable preference shares to Triumph Offshore shareholders.

The merger will be executed on an arm’s length basis, according to Swan Energy. Triumph Offshore focuses on purchasing and operating vessels such as boats, tugs, and drifters, while Reliance Naval and Engineering is involved in vessel construction, ship and rig repair and refit, and heavy engineering.

Sources informed Business Today that this merger is likely a step toward an eventual listing of Reliance Naval and Engineering. The company, which was financially distressed, had previously undergone a corporate insolvency resolution process to restructure its balance sheet.

Swan Energy explained that the amalgamation is aimed at consolidating its activities under a single entity, leveraging the complementary capabilities of both companies. The merged entity will oversee the entire value chain, from vessel design and construction to financing, leasing, and management, thereby enhancing cost control, quality, and delivery efficiency.

The merger is also expected to create a more competitive and diversified entity capable of competing with global players in shipbuilding and heavy engineering. The combined entity is set to benefit from rising demand for naval defense, energy infrastructure, and commercial shipping in both domestic and international markets.

Swan Energy reported a net profit of Rs 1.22 crore for the September quarter on revenues of INR 25.54 crore. On Friday, Swan Energy’s shares closed at Rs 589 on the National Stock Exchange, marking an 11.55% increase.

Swan Energy had acquired Reliance Naval, previously controlled by Anil Ambani, through an NCLT resolution plan. Reliance Naval shares were suspended from trading on July 14, 2023, due to procedural reasons.

(With inputs from Informist)