IFFCO fights Swan over stake in Triumph JV
BSE-listed Swan Energy is facing a challenge from IFFCO (Indian Farmers Fertiliser Cooperative), which does not want its stake reduced in their Triumph Offshore JV.
Very soon, the National Company Law Tribunal (NCLT) Ahmedabad bench of Dr VG Venkata Chalapathy and Chitra Hankare will hear arguments in the case, slated for April 4 (2024). IFFCO approached the NCLT on February 19 (2024) with a request to restrain Swan from "doing anything which may result in the dilution of IFFCO's shareholding."
NCLT registered the case on February 28 (2024) and held a hearing on February 29 (2024) and another on March 7 (2024). In its petition, IFFCO claims its Triumph JV with Swan is pre-paying debt in a way that might dilute IFFCO's shareholding.
"Any dilution would be detrimental to our interests," argues IFFCO in its petition. In August 2019, IFFCO took a 49% stake worth Rs262.15cr ($31.6m) in Triumph.
Swan holds a 51% stake worth Rs272.84cr ($33m). Triumph is a Special Purpose Vehicle (SPV) floated by Swan in 2017 to acquire and manage Vasant (also known as Vasant-1), a Floating Storage Regasification Unit (FSRU) originally conceived for the much-delayed Swan LNG project at Jafrabad.
In its petition, filed under sections 241 and 22 of the Companies Act 2013, IFFCO alleges "oppression and mismanagement." IFFCO wants a restraining order on Triumph from passing any resolution without IFFCO's approval.
IFFCO also wants the NCLT to stop Swan and Triumph from issuing shares to lenders against loans. One such loan is an Rs1604cr ($193.8m) facility that Triumph has applied to banks for.
Of this, the State Bank of India (SBI) has already approved Rs500cr ($60.4m) after Triumph mortgaged IFFCO's share capital with SBI to secure the loan. Separately, Swan company secretary Arun Agarwal announced on March 2 (2024) that Swan LNG, a Swan Energy subsidiary implementing the Jafrabad LNG project, has repaid a different loan and interest of Rs2206cr ($267m) to a consortium of banks.
"The group's external debt position was Rs4128cr ($498.7m) in September 2023 and reduced to Rs3917cr ($473m) in December 2023," said Agarwal. "It now stands at Rs1675cr ($202m)."