India: The boards of Power Finance Corporation Ltd (PFC) and REC Ltd have approved a proposed scheme to merge REC into PFC.
According to REC, the merger would create a large power sector financing institution with a loan book of more than $166 B (Rs. 11 T). The combined entity is expected to play a central role in supporting India’s power sector reforms, infrastructure programmes and wider energy transition objectives.
The merger remains subject to several approvals, including consent from shareholders and creditors of both companies, as well as relevant regulatory and government authorities. The scheme also requires the merged entity to continue qualifying as a Government Company under the Companies Act, 2013, with the Government of India retaining majority voting rights and control, either directly or indirectly.
Under the proposed share exchange ratio, REC shareholders would receive 88 fully paid-up PFC equity shares of $0.11 (Rs.10) each for every 100 fully paid-up REC equity shares of $0.11 (Rs.10) each. The record date will be determined later by the boards of PFC and REC.
REC said the merged entity would become the government’s principal institution for implementing power sector reforms and flagship programmes. With greater scale, stronger financial capacity and broader institutional capabilities, the combined company is expected to support national policy goals and accelerate the development of India’s power sector.
Source: T&D India
