India is considering a proposal to combine two state-run lenders to utilities, REC Ltd. and Power Finance Corp. The government owns 58% of REC (formerly Rural ElectrificationNSE -0.63 % Corp) and 66% of PFC.
The government has proposed that Power Finance Corp acquire REC in a Rs 14,000-crore deal, a surprising reversal of the previous plan of REC taking over PFC.
By the year ending March 2019, REC acquiring a majority stake valued at about $2.5 billion in Power Finance.
According to those associated with the developments, the merger — if it happens — will result in an integrated power sector lending institution with a pan-India presence and will provide an opportunity for the Centre to make money and meet its disinvestment target.
Proposal for merger of Rural electrification corporation ltd and Power finance corp.
December 12, 2018
