CCEA Approves Sale of Govt’s 52.63% Stake in REC to PFC

It may also allow for cheaper fund raising with increase in bargaining power for the combined entity.

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The Cabinet has provided its ‘In Principle’ approval for the strategic sale of the government’s existing 52.63 percent total paid-up equity shareholding in Rural Electrification Corporation (REC) to Power Finance Corporation (PFC).

The government said in a notification that, “The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi has given its ‘In Principle’ approval for the strategic sale of the Government of India’s existing 52.63% of total paid up equity shareholding in Rural Electrification Corporation (REC) to Power Finance Corporation (PFC) along with transfer of management control.”

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Moreover, the acquisition intends to achieve integration across the power chain, obtain better synergies, create economies of scale and have enhanced capability to support energy access and energy efficiency by improved capability to finance power sector, it added.

It may also allow for cheaper fund raising with increase in bargaining power for the combined entity.

Both REC and PFC are Central Public Sector Enterprises under the Ministry of Power.