Power Finance Corporation Ltd. (PFC) has signed a Share Purchase Agreement to acquire 103.94 crore equity shares of INR 10/- each, of REC Limited from the President of India constituting 52.63% of the paid-up share capital of REC Limited. This is a major milestone achieved by PFC, who is now slated to become a promoter and the holding company of REC Limited.
The acquisition of REC Limited was in pursuance to the in-principle approval dated 6th December 2018 from the Cabinet Committee on Economic Affairs for the strategic sale of 52.63% of the paid up equity shareholding of REC held by the President of India (acting through Ministry of Power, Government of India) to PFC along with transfer of management control.
Both PFC and REC are Navratna Central Public Sector Enterprises with combined annual revenues of about Rs. 50,000 Crore and this acquisition is step towards consolidation of companies operating in the same space.