REC and PFC Boards Endorse Merger Plan; Details on Swap Ratio and Additional Information Released – CNBC TV18

Power Finance Corporation and REC Limited Approve Merger Scheme

The boards of directors of Power Finance Corporation (PFC) and REC Limited have officially approved a merger scheme that aims to create a financial powerhouse in the Indian electricity sector with a combined valuation of approximately ₹11 lakh crore (around $132 billion). This significant move is anticipated to streamline operations and strengthen financing provisions within Indias power sector, which is crucial for supporting the countrys infrastructure and energy needs.

Under the terms of the approved merger, shareholders will receive a swap ratio of 88 PFC shares for every 100 shares of REC. This decision is expected to optimize financial resources and enhance the funding capabilities of the newly formed entity.

The merger is part of the Indian governments larger strategy to consolidate state-owned enterprises, with the aim of improving efficiency and reducing needless competition among public sector companies. This initiative comes at a time when India is focusing on bolstering its energy sector, in alignment with its increasing demand for electricity and ambition to transition to sustainable energy sources.

Both PFC and REC play pivotal roles in financing projects related to power generation, transmission, and distribution. Together, their merger is expected to facilitate large-scale investments in renewable energy sources, in response to global climate change challenges and India’s commitments under international agreements.

As the merger progresses, regulatory approvals and detailed integration plans will be key steps for the successful realization of this ambitious initiative.