REC board to meet on Sep 19 to consider FPO

State-run Rural Electrification Corporation (REC) today said its board will meet on September 19 to consider the proposal of follow-on public offer (FPO).

The company is looking to raise around Rs 2,900 crore through FPO, which is likely to come up by the end of current fiscal (2009-10).

In a filing to the Bombay Stock Exchange, REC said, "A meeting of the board of directors of the company will be held on September 19, 2009, to consider the proposal of FPO of equity shares, subject to the approval of the government of India."

The company wants the capital raised to disburse loans to power projects.

REC would issue about 17 crore shares of face value of Rs 10 each. Considering the current market situation, the company is hoping to fetch about Rs 2,900 crore through premium to be decided later, sources said.

Earlier, REC had requested the Power Ministry to raise fresh equity of 20 per cent of the existing capital of Rs 858 crore either through institutional placement or FPO.

For the first quarter ended June 30, REC reported a net profit of Rs 471.82 crore. Total income of the company rose to Rs 1,508.90 crore during the June quarter from Rs 1,022.78 crore in the corresponding period a year ago.

Shares of REC were trading at Rs 197, down 3.36 per cent in the late afternoon trade on BSE.