Swan Energy Shares Extended Gains After Merger News

Swan Energy shares extended their positive momentum on Monday, November 25, 2024. Opening at ₹613.15, the stock reached a high of ₹620.25 by 11:20 AM, marking an increase of over ~4% from the previous trading session. The notable surge in Swan Energy share price followed the announcement of a merger between its subsidiaries, Reliance Naval and Engineering and Triumph Offshore. Triumph Offshore, a wholly-owned subsidiary of Swan Energy, is set to merge into Reliance Naval and Engineering under the proposed deal. Swan Energy had previously acquired Reliance Naval through an NCLT resolution plan. Reliance Naval, once controlled by Anil Ambani, had its shares suspended from trading on July 14, 2023, due to procedural reasons.

Merger Details and Regulatory Approvals

The merger plan requires approval from several regulatory bodies, including the Ahmedabad bench of the National Company Law Tribunal (NCLT), stock exchanges, and the Securities and Exchange Board of India (SEBI). As per the scheme, for every 1,000 shares held by Triumph Offshore shareholders, 1,325 redeemable preference shares of Reliance Naval and Engineering will be issued. The merger will lead to the dissolution of Triumph Offshore without the need for winding up.

Shareholding and Organisational Impact

The shareholding pattern of Reliance Naval and Engineering will remain unchanged, as only redeemable preference shares will be issued to Triumph Offshore’s shareholders. Swan Energy emphasized that the merger will be conducted on an arm’s length basis, ensuring fairness and transparency in the transaction.

Business Synergies and Strategic Benefits

The merger is designed to consolidate Swan Energy’s operations under a single entity, combining the strengths of both companies. Triumph Offshore primarily deals with vessel operations, including boats, tugs, and drifters, while Reliance Naval focuses on vessel construction, ship repair, and heavy engineering. The merged entity will oversee the entire value chain, including vessel design, construction, financing, leasing, and management.

Expansion and Growth Prospects

This strategic merger aims to create a more competitive and diversified entity capable of challenging global players in shipbuilding and heavy engineering. The combined entity is well-positioned to capitalize on the growing demand for naval defence, energy infrastructure, and commercial shipping, both in domestic and international markets.

Swan Energy’s Financial Performance

For the September quarter, Swan Energy reported a net profit of ₹1.22 crore on revenues of ₹25.54 crore. The company’s shares closed at ₹589 on the National Stock Exchange on Friday, reflecting a gain of 11.55%.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.