State-owned Power Finance Corporation (PFC) has signed share purchase agreement to acquire all 52.63% shares of Central Government in Rural Electrification Corporation (REC) for about Rs 14,500 crore.
- It is in pursuance to the in-principle approval of December 2018 from Cabinet Committee on Economic Affairs for strategic sale of REC.
- Under this agreement, PFC will acquire 103.94 crore equity shares of Rs 10 of REC from President constituting 52.63% of paid-up share capital. With this PFC is now slated to become a promoter and the holding company of REC.
- This step towards consolidation of companies operating in the same space. Both PFC and REC are navratna central public sector enterprises with combined annual revenues of about Rs 50,000 crore.
- It will enable increased efficiencies in lending processes and policies across both companies and create public value by offering better loan products to power sector.