PFC Concludes REC Procurement, Pays Rs 14,500 Crores to the Government

State-owned Power Finance Corporation (PFC) has announced that it has concluded the acquisition of majority stake in REC by conveying Rs 14,500 crore to the government, an official believed.

The deal has helped the government meet its disinvestment objective of Rs 80,000 crore for the current financial year.

"The entire consideration of Rs 14,500 crore for acquiring 52.63 per cent equity of the Government of India in REC is paid by PFC through RTGS (real-time gross settlement) mode this morning," the official alleged.

The official further thought PFC Chairman and Managing Director Rajeev Sharma handed over the RTGS advice to Power Secretary A K Bhalla to complete the acquisition. The money has been conveyed into the government's account online.

The official further that the government's 52.63 per cent equity in REC would be transferred in the name of the PFC by the closing of the stock market.

PFC has raised money from Bank of Baroda, Life Insurance Corporation and State Bank of India, among others, to make the payment.

Earlier, PFC had signed a share purchase agreement to procure 103.94 crore equity shares of Rs 10 each of REC Ltd.

This deal was in enactment to the in-principle approval from the Cabinet Committee on Economic Affairs for strategic sale of 52.63 per cent of paid-up equity shareholding of REC held by the government to PFC, along with the transfer of management control.

Both PFC and REC are Navratna central public sector enterprises with a collective annual revenue of about Rs 50,000 crore and this procurement is a step towards consolidation of companies operating in the same space. PFC bought REC shares at Rs 139.50 per piece with total procurement cost of about Rs 14,500 crore.