New Delhi [India], Mar 21 (ANI): State-owned Power Finance Corporation (PFC) has signed a share purchase agreement to acquire all 52.63 per cent shares of the government in Rural Electrification Corporation (REC) for about Rs 14,500 crore.
Both PFC and REC are navratna central public sector enterprises with combined annual revenues of about Rs 50,000 crore. The acquisition is a step towards consolidation of companies operating in the same space, PFC said in regulatory filings at stock exchanges late on Wednesday.
"PFC will acquire 103.94 crore equity shares of Rs 10 of REC from the President constituting 52.63 per cent of the paid-up share capital. This is a major milestone achieved by PFC which is now slated to become a promoter and the holding company of REC."
PFC has already arranged funds for the acquisition which will be complete by March 28. It is in pursuance to the in-principle approval of December 6 last year from the Cabinet Committee on Economic Affairs.
"The acquisition will enable increased efficiencies in lending processes and policies across both institutions, and create public value by offering better loan products to the power sector," PFC said in the statement.
"The convergence between the entities as combined group entities will help the power sector reap benefits from a decentralised outreach of REC and a professional project finance expertise of PFC."
Further, the ensuing diversification of assets of the group, as well as portfolio risk will help in resolution of stressed power sector assets of the group in a better and coordinated manner, said PFC.