Thread by @BeatTheStreet10

Beaware⚠️

Reliance Naval - Garbage Stock which soon erode shareholders wealth as NCLT has approved the Resolution Plan of Hazel Mercantile & Swan Energy

Why Exchanges / Regulators have allowed it to trade? Can't they suspend trading just like other cases

They will pay around 2k crore against debt of 9k crore

Nothing left for existing equity - delist or equity write off

So be cautious if you are buying Reliance Naval just because Swan Energy & Hazel Mercantile are buying and stock is in upper circuit

Reliance Naval NCLT order says existing equity will be cancelled & extinguished. Subject to

Existing SH will get 1 share in RNAVAL 2.0 for every 275 shares held in RNAVAL

Existing SH will be able recover losses if Share price of new entity rose upto 800+ (275x)

#Reliancenaval

So ideally Reliance Naval investors shoukd exit ASAP if they don't want to drown away with sinking ship.

Link to NCLT Order
bseindia.com/xml-data/corpf…

Few interesting things from order :

1. NCLT order doesn't provide about trading suspension even after knowing the fact existing shareholders will loose money thereby exposing retail shareholders to huge loss. AGAIN

Cont..

2. SEBI says to keep bankrupt co listed after resolution plan implementation existing shareholders must have atleast 5 % of equity. Resolution plan provides 5.09% equity to them just to remain listed.