PFC signs agreement to acquire majority stake in REC

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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.

Key Facts:

  •  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.

Source:BS

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