Suzlon Energy’s board has approved the merger of Suzlon Global Services, a wholly-owned subsidiary with itself.
The company also plans to transfer its project business through a slump sale to one or more wholly-owned subsidiaries of the company.
Suzlon will also undertake a capital reorganisation exercise through the Scheme of Arrangement by re-classification and transfer of general reserve to retained earnings of the company and also merge Suzlon Energy Mauritius, another wholly-owned subsidiary, with itself.
The company said that there will be no change in the existing shareholding pattern of Suzlon post this restructuring exercise.”
The meger strengthens the stand-alone balance sheet by combining two major business of the group in listed entity.
Strategically manage finances for relocation of resources effectively and reinvesting in areas that promise better returns,” the company said in an investor presentation.
Furthermore, the merger enables Suzlon to provide wind turbine generator (WTG) and operation and maintenance service (OMS) contracts seamlessly under one entity, eliminating inter-company balances to bolster the net worth of Suzlon Energy SEL at a standalone level, the company stated.
“Project execution business and land activities to be managed through separate legal entities for better control,” it said.
The merger with Mauritius entity helps in reducing additional one-layer of overseas holding structure , enhancing transparency and reducing reporting/compliance requirements and associated costs, it added.