 "Power Finance Corporation, REC fall 10% on merger reports")
Shares of state-owned lenders to utilities REC and Power Finance Corporation (PFC) are down 10% each on BSE amid reports that the government is considering merger of these two companies.
REC has slipped 10% to Rs 110, while PFC dipped 10.5% to Rs 91 on BSE in the intra-day trade on Wednesday. In comparison, the S&P BSE Sensex was up 0.61% at 35,730 points at 02:17 pm.
Since October 9, from their recent lows, PFC (up 38%) and REC (up 23%) had outperformed the market by surging more than 20%, against a 3.5% rise in the benchmark index till Tuesday.
REC, yesterday informed the stock exchanges that the board of directors of the company is scheduled to meet on December 5, 2018, to consider and approve the un-audited (standalone) financial results of the company for the second quarter ended September 30, 2018.
According to Bloomberg report, the first phase of the deal will see REC acquiring a majority stake in PFC valued at $2.5 billion possibly by the year ending March 2019, the people said, asking not to be named as the talks aren’t public. Subsequently, the plan is to merge the subsidiary with REC, a departure from the original plan to keep their operations separate.
The merger plan is being considered after REC expressed concern that just acquiring a controlling stake in Power Finance would weaken its credit profile and wouldn’t yield any operational benefit, added report. CLICK HERE TO READ FULL REPORT
REC has slipped 10% to Rs 110, while PFC dipped 10.5% to Rs 91 on BSE in the intra-day trade on Wednesday. In comparison, the S&P BSE Sensex was up 0.61% at 35,730 points at 02:17 pm.
Since October 9, from their recent lows, PFC (up 38%) and REC (up 23%) had outperformed the market by surging more than 20%, against a 3.5% rise in the benchmark index till Tuesday.
REC, yesterday informed the stock exchanges that the board of directors of the company is scheduled to meet on December 5, 2018, to consider and approve the un-audited (standalone) financial results of the company for the second quarter ended September 30, 2018.
According to Bloomberg report, the first phase of the deal will see REC acquiring a majority stake in PFC valued at $2.5 billion possibly by the year ending March 2019, the people said, asking not to be named as the talks aren’t public. Subsequently, the plan is to merge the subsidiary with REC, a departure from the original plan to keep their operations separate.
The merger plan is being considered after REC expressed concern that just acquiring a controlling stake in Power Finance would weaken its credit profile and wouldn’t yield any operational benefit, added report. CLICK HERE TO READ FULL REPORT
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