Suzlon Looks to Restructure, Set To Merge Suzlon Global Services

Suzlon Energy is an Indian Multinational wind turbine manufacturer founded in 1995, It is headquartered in Pune. It is a pioneer in the field of wind energy, it currently has a presence in 17 countries and has installed over 12,860 wind turbines across 6 continents. The board of Suzlon Energy Ltd. has approved a scheme of amalgamation under which there will be a merger of a wholly owned subsidiary, Suzlon Global Services with Suzlon Energy itself.

About the proposed restructuring

The wholly owned subsidiary of the company, Suzlon Global Services is set to merge with Suzlon Energy itself and the company has also said that this exercise of amalgamation will not result in any change in the existing shareholding pattern of the company, Suzlon Limited post this exercise.

The company is also looking to transfer its project business on a slump sale basis to one or more wholly owned subsidiaries of the company itself, Slump sale means to transfer a part or whole of a business to another firm. Under this, the buyer will gain ownership of assets, debt, intellectual properties, contracts and staff from the seller.

Why This Restructuring Exercise?

The Company has said that this restructuring will lead to a strong financial position for the firm, the restructuring process will also allow the company to efficiently utilise resources, and there would be a streamlined group structure that would allow the firm to take benefit of combined resources. The proposed restructuring will also result in efficiency in the business operations of the Wind Turbine Generation and Operation and Maintenance businesses.

Stock Performance

The stock of Suzlon Energy Limited trades at Rs.41.5 a piece down by -0.5% as of 3 May 2024, The stock has provided attractive returns of 4% in the past year. The Year-to-date returns of the stock stand at 7%. The stock has made a 52-week high of Rs.50.60  on February 2, 2024.

Conclusion: The restructuring exercise is surely going to help the business of the company in the long run. The company is planning to improve its business in the future. It has also received various orders in the past 1 year and on the back of those orders the stock has jumped more than 400% in the past one year from the level of Rs.8 per share. The current Market Capitalisation of Suzlon Energy stands at more than Rs.56,000 crores.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.