PFC completes REC acquisition, merger expected in 2019-20

The Power Finance Corporation (PFC) has completed the acquisition of a majority stake in the Rural Electrification Corporation (REC). PFC has acquired 1.04 billion shares constituting a 52.63 per cent equity stake held by the government in REC along with management control, at a cash purchase consideration of Rs 145 billion. The acquisition price of REC per equity share works out to Rs 139.50. PFC has financed 70 per cent of the deal from cash inflows from the business and the balance 30 per cent is through debt. Going forward, the merger is expected to be completed in 2019-20 and the exact timelines will be decided in consultation with the government.