Power Finance Corporation update on proposed acquisition of Govt.'s stake in REC

Addressing queries from the investors, Power Finance Corporation shared the following -

The Board of Directors of Power Finance Corporation in their meeting held on 20 December 2018 has given an in-principle approval to the acquisition of GOI's stake in REC.

The Government of India intends to conclude the transaction by the end of the current financial year, i.e. by 30th March 2019.

Currently, PFC had not agreed to a definitive pricing for acquiring GOI's stake in REC, and the figures being discussed in various media reports are purely speculative in nature. The actual transaction price will be known once the modalities of the deal are decided by PFC in discussion with GOI and in compliance with applicable law.

Further, the funding of transaction is likely to happen through internal sources and/or debt raising. Also, considering the quantum of funds being raised by PFC each year for its routine business, in case debt funds are raised for the transaction, not much impact is expected on the total borrowings of PFC for the year. However, a firm financing structure/plan has not been devised yet by PFC as modalities of the deal are yet to be finalised.

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