Govt mulls selling its stake in PFC to REC
The government is considering selling its 65.61 per cent stake in state-owned Power Finance Corporation (PFC) to Rural Electrification Corporation (REC), which could fetch the exchequer about Rs 13,000 crore.
“The discussions are at a preliminary stage. The government sees a lot of synergy between the two NBFCs funding power sector projects,” an official said.
At the end of 2017-18, the total resources of REC stood at over Rs 2.46 lakh crore, of which reserves were Rs 33,515.59 crore. The net worth of the company was Rs 35,490 crore and ‘cash and bank balance’ were Rs 1,773 crore at the end of March 2018.
The REC stock was trading at Rs 98.90, down 7.35 per cent, while the PFC scrip was trading at Rs 79.60, 1.18 per cent lower over its previous close on the BSE. At the current market price, the government may garner around Rs 13,000 crore from the stake sale in PFC.
The REC-PFC deal is being considered on the lines of the acquisition of the government’s entire 51.11 per cent stake in oil refiner HPCL by state-owned ONGC in 2017-18. The government bagged Rs 36,915 crore from the stake sale.
Finance Minister Arun Jaitley had in the budget for 2017-18 said there were opportunities to strengthen CPSEs through consolidation, mergers and acquisitions. “By these methods, CPSEs can be integrated across the value chain of an industry. It will give them capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for the stakeholders,” he had said.