PFC raises $ 300 million through a three-year syndicated loan from SBI, Honk Kong and MUFG Bank, Singapore.
The Power Finance Corporation (PFC), a state-owned non-banking financial company (NBFC) that funds power sector projects has announced that it has raised $ 300 million through a three-year syndicated loan from the State Bank of India, Honk Kong and MUFG Bank, Singapore.
The financing firm has announced in a regulatory filing that this is the second foreign currency borrowing it has secured in the current quarter. Earlier, the company had raised $1 billion through the issuance of Reg-S bonds which was the biggest bond issuance overseas by a government-owned. NBFC.
The NBFC further highlighted that by concluding the current $300 million deal, it has already mobilised $1.3 billion indicating investor’s confidence in PFC post its buyout of the 52.63 percent government shareholding in Rural Electrification Corporation Limited (REC).
It is believed that the company is planning to finance power transmission projects awarded to private transmission project developers, through tariff-based competitive bidding.
In December 2018, the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi had 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 REC to Power Finance Corporation along with transfer of management control. Later in February this year, the Competition Commission of India had approved PFC’s acquisition of the 52% stake in the REC.
In May, PFC reported a twofold rise in its standalone net profits to Rs 2,117.56 crore for the March 2019 quarter, mainly on the back of reduction in the cost of funds and retiring of high-cost loans. The company had reported a net profit of Rs 796.35 crore in the corresponding quarter of the previous fiscal.
During the quarter, PFC completed the acquisition of state-owned REC. Thus, the firm’s consolidated loan asset book after the acquisition stood at Rs 5,95,877 crore, while the net worth is Rs 63,484 crore.