Angry IFFCO dumps Swan and exits Triumph
Some matches are made in heaven, but not this one.
After much acrimony, Swan Energy and the state-controlled Indian Farmers Fertilisers Cooperative (IFFCO) have parted ways. IFFCO has exited Triumph Offshore, its LNG joint venture with BSE-listed Swan, which owns and manages the 2020 Hyundai-built FSRU Vasant (also known as Vasant-1).
Swan now holds 100% after IFFCO offloaded its 49%. "Triumph has now become a wholly owned subsidiary," Swan announced in its 2023-24 annual report at the AGM on September 26 (2024).
"The company, at its board meeting on June 24 (2024), considered and approved the acquisition of 262,150,000 equity shares of Rs10 ($0.12) each of Triumph (49% of the total equity) from IFFCO at a total price of Rs440cr ($53m), as per the Share Purchase Agreement (SPA)." Triumph's board approved the SPA on June 26 (2024), added Swan.
"Swan has paid the entire consideration of Rs440cr ($53m) to IFFCO, and the formalities related to the transfer of shares are in process," continued Swan. IFFCO's exit does not surprise many.
"Swan and IFFCO were never on the same page," says a source. "In the past four years, friction between both partners was frequent."
Another source claims the ruling BJP pushed IFFCO to take a stake in Triumph. "IFFCO is a cash-rich farmers body, and Swan needed an investor," we hear.
In August 2019, IFFCO took a 49% stake in Triumph for Rs262.15cr ($31m). In March 2024, the friction reached a crescendo after IFFCO moved the Ahmedabad bench of the National Company Law Tribunal (NCLT) against Swan and Triumph.
IFFCO filed the petition under Sections 241 and 242 of the Companies Act, 2013, alleging oppression and mismanagement by 51% partner Swan. IFFCO sought a restraint against Triumph passing any resolution without its approval and issuing any shares or securities to lenders against loans.
In its petition, IFFCO claimed Triumph was pre-paying debt, which could dilute its shareholding. In particular, IFFCO was worried that Swan had mortgaged its share capital to secure a Rs1604cr ($192m) term loan from banks, including Rs500cr ($60m) from SBI.