Additionally, Suzlon Energy plans to transfer its project business through a slump sale to one or more wholly-owned subsidiaries.
This is part of a broader capital reorganisation exercise that also includes the merger of Suzlon Energy, Mauritius, another wholly-owned subsidiary, with the parent company.
The tentative timeline for the completion of the merger is 6-10 months, subject to necessary approvals. Suzlon Global Services manages the operation and maintenance of wind turbine generators among other businesses. Since it is a wholly-owned subsidiary, no shares will be allotted as part of the merger. The company also expects that the merger will strengthen its stand-alone balance sheet, which is crucial for public sector unit bids.
It's worth noting that Suzlon Energy shares have seen significant movement in the past years, with a notable increase in value over one, three, and five-year periods. The restructuring is seen as a positive step towards streamlining operations and enhancing efficiency within the company.
The merger of Suzlon Energy with its wholly-owned subsidiary, Suzlon Global Services, is driven by several strategic reasons aimed at strengthening the company's position and streamlining its operations. Here are the key factors cited by Suzlon for the restructuring exercise:
1. Stronger Financial Position: The merger is expected to consolidate the financials, leading to a more robust balance sheet.
2. Unified Contracting: By combining the entities, Suzlon aims to simplify the contracting process for its customers.
3. Elimination of Inter-Company Outstanding: The merger will help in eliminating inter-company transactions, which can simplify financial statements and operations.
4. Efficient Utilisation of Resources: The consolidation is aimed at better resource management across the combined entity.
5. Streamlining Group Structure: The merger will result in a simplified group structure, which is anticipated to improve transparency and efficiency.
6. Benefit of Combined Resources: By merging, the company can leverage the combined resources for better operational performance.
7. Efficiency in Business Operations: The merger is expected to bring efficiency in the business operations of the Wind Turbine Generation and Operations and Maintenance (OMS) businesses.
These factors are part of Suzlon's broader capital reorganisation exercise, which includes transferring its project business through a slump sale to one or more wholly-owned subsidiaries and merging Suzlon Energy, Mauritius, with itself.
The overall goal is to create a more streamlined, efficient, and financially stable company that can better compete in the renewable energy market.
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