Suzlon Energy to merge wholly-owned subsidiary with itself as part of restructuring plan
Upstox
2 min read • Updated: May 3, 2024, 2:58 PM
Summary
Suzlon Energy said that the tentative timeline for completion of the merger is 6-10 months, subject to approvals of creditors, lenders, shareholders along with related regulatory approvals and compliances.
- SUZLON-RE--
Suzlon Energy Ltd shares are in focus on Friday, May 3, after the company announced a restructuring plan with an aim to have an optimised structure for enabling future growth.
Suzlon Energy’s Board Of Directors at its meeting held on May 2 (Thursday) approved the scheme of amalgamation involving merger by absorption of Suzlon Global Services Ltd, a wholly-owned subsidiary of the company, with itself.
In a filing to the stock exchanges, the company said that the tentative timeline for completion of the merger is 6-10 months, subject to approvals of creditors, lenders, shareholders along with related regulatory approvals and compliances.
Suzlon Global Services is primarily engaged in the business of operation and maintenance of the wind turbine generators along other businesses.
Since Suzlon Global services is a wholly owned subsidiary of Suzlon Energy, no shares shall be allotted, nor any other consideration shall be paid in lieu or exchange of Suzlon Energy’s holding in Suzlon Global upon the scheme of amalgamation becoming effective.
Highlighting the need for restructuring, Suzlon Energy said that the amalgamation would result in simplified group structure to further improve transparency. Suzlon Energy also said that the merger would strengthen its stand-alone balance sheet, which is an important criteria for PSU (public sector unit) bids.
“Two divisions of the same entity provide WTG (wind turbine generator) sale and O&M (operations and maintenance) services, resulting in improved customer comfort,” the company added.
The board on Thursday also granted an in-principle approval for merger of Suzlon Energy Ltd, Mauritius (SELM) into Suzlon Energy to reduce layers. SELM is a wholly owned subsidiary of Suzlon Energy Ltd, India. The merger should take 6-9 months to complete.
Shares of Suzlon Energy were trading almost flat on Friday after the announcement of the restructuring plan. At 12:15 pm, the stock was 0.4% lower at ₹41.55 apiece on the NSE.