Suzlon Energy’s board has given the green light to the merger of its wholly-owned subsidiary, Suzlon Global Services, with the parent company itself.
What Happened: The wind energy major on Friday announced the merger late on Thursday. Suzlon plans to execute a capital reorganisation through a Scheme of Arrangement, involving the reclassification and transfer of general reserve to retained earnings. This restructuring initiative also encompasses the merger of Suzlon Energy Ltd., Mauritius, another wholly-owned subsidiary, with the parent company. The company also intends to transfer its project business via a slump sale to one or more wholly-owned subsidiaries.
It’s important to note that Suzlon assures that there will be no alteration in its existing shareholding pattern following this restructuring endeavour.
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Talking about the restructuring efforts, the company said that it will benefit its operations in many ways. The move is expected to streamline communication and decision-making processes, ultimately fostering greater clarity and efficiency across the board.
This restructuring effort is poised to fortify Suzlon’s standalone balance sheet, a critical factor for participating in bids within the public sector undertakings (PSU) segment. The integration of Wind Turbine Generator (WTG) sale and Operations & Maintenance (O&M) services within two divisions of the same entity is set to enhance operational synergy and customer satisfaction.
The restructuring initiative is geared towards optimizing working capital management by eliminating inter-company balances.
Price Action: Suzlon’s share price was down 0.45% to trade at ₹41.50 in the early hours of trading on Friday.
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