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Informist, Wednesday, Apr. 29, 2026

 

--NCLT OKs scheme for reduction, reorganisation of Suzlon Energy's reserves

 

By Surya Tripathi

 

NEW DELHI – The Ahmedabad bench of the National Company Law Tribunal Wednesday approved a scheme of arrangement for the reduction and reorganisation of Suzlon Energy Ltd.'s reserves. A bench of judicial member Chitra Ram Hankare and technical member Velamur Govindan said the scheme of arrangement was in the interest of Suzlon Energy and its shareholders and the future growth of the company. Suzlon Energy is in the business of manufacturing and supplying wind turbine generators.

 

The shareholding pattern of Suzlon Energy will not undergo any change due to the scheme of arrangement, said the tribunal. Any pay out, other than as dividend to the existing shareholders, shall require prior approval by the shareholders through annual general meeting or extra-ordinary general meeting, said the tribunal.

 

Suzlon Energy said it had suffered losses in the past, due to which it has been facing challenges to scale its business and unleash its full potential for growth and profitability. However, there has been a turnaround in the operations and business of the company, said Suzlon Energy. After proactively managing its debt position by way of debt restructuring agreements and repayment of debt, clubbed with the boost in the renewable energy markets, the company has been able to report profits on a standalone basis in the financial year (Apr-Mar) 2022-23, FY24 and for the period ended Jun. 30, 2024, it said.

 

Despite this, the accumulated losses are weighing down the financial statements of the company with a substantial amount of accumulated negative retained earnings being not reflective of its true current financial health, said Suzlon Energy. The company continues to carry a debit balance of retained earnings on its balance sheet, it said.

 

At the same time, the company has unutilised balances lying under various reserves, which are neither earmarked for any specific purpose, nor have any lien marked thereon or obligation attached therein, said Suzlon Energy. It is of the view that the financial statements of the company are not reflective of its true current financial health and therefore, it is necessary to reduce and reorganise its reserve, it said.

 

In a strategic move to reduce and reorganise the reserves of the company, it will set off the negative balance in the retained earnings chronologically against capital reserve, capital contribution, capital redemption reserve, securities premium and general reserve. The set-off could potentially reap strategic benefits such as the financial statements of the company would reflect its true and fair financial health, it will obliterate the capital being lost and not represented by available assets of the company and help in resizing the reserves and thereby denoting a positive reserve representing its true and fair financial position which is commensurate with its business and assets, said Suzlon Energy.

 

The set-off would enable the company to explore opportunities for the benefit of its shareholders regarding dividend payment, it said. The amount reclassified to the retained earnings shall be available for distribution to the equity shareholders of the company, from time to time, by the Board of Directors, at its sole discretion, said Suzlon Energy. The scheme of arrangement would not have any impact on the shareholding pattern of the company, it added. 

 

Wednesday, shares of Suzlon Energy ended 0.9% lower at INR 56.81 on the National Stock Exchange.  End

 

Edited by Vandana Hingorani

 

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