PFC, REC, NTPC could form joint venture to bid for stressed assets

Two leading public sector lenders in the power business and a state-owned power-generating giant are likely to come together and bid for stressed assets that will go through resolution under the Insolvency and Bankruptcy Code (IBC).Power Finance Corporation (PFC), which has a considerable debt exposure to the sector; Rural Electrification Corporation, which lends to development power schemes; and maharatna public sector undertaking (PSU) NTPC are thinking of forming a company that will buy out power projects.The proposed venture might have equity participation from other PSUs like NHPC, PowerGrid, and Bharat Heavy Electricals. The companies are hoping to form the venture before the 180-day period set by the RBI for lenders to stressed companies lapses, according to sources.Senior executives in PFC said the projects which would come to the National Company Law Tribunal (NCLT) offered a good opportunity. “If we can ensure a fair price for these projects and hold on to them for a year or so, they will be a gold mine in the future as demand is increasing,” said an executive.

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