According to the sources, PFC has borrowed fund at an interest rate as high as 7.25 per cent for completing this deal while it is rasing money through bonds at a rate as low as 4.25 per cent for funding power sector projects.
The government’s decision to sell BPCL, SCI and Concor indicates it is no longer diffident about privatisation
It should not be viewed as selling the family silver but for changing the structure of PSUs and improving their efficiency.
The transaction saw an oversubscription of more than four times with active participation from more than 140 major international investor accounts, allowing it to price inside its current market levels with the tightest coupon ever on its five-year bond.
The funds will actually be raised, from time to time, during a period of one year from the date of passing of resolution by the shareholders in the ensuing AGM.
The company's main source of revenue is interest income from advances or loans.
The transaction assumed significance because it helped the government meet its disinvestment target of Rs 80,000 crore for the current financial year.
The transaction has helped the government meet its disinvestment target of Rs 80,000 crore for the current financial year.
PFC has bought REC share at Rs 139.50 per piece with total acquisition cost of about Rs 14,500 crore.
The breadth of the market favoured the declines with 360 stocks advancing and 1,348 declining while 394 remained unchanged. On the BSE, 664 stocks advanced, 1,813 declined and 148 remained unchanged.
Raiding the balance sheet of PSUs and forcing them to buy other state-owned companies will not help in the long run and is best avoided
Ajeet Kumar Agarwal, CMD & Director (Finance) of REC presented RTGS credit advice towards payment of interim dividend for the 2018-19, amounting to Rs 1,143.34 crore on the shareholding of the central government in REC to R K Singh, Minister of State for Power (Independent Charge) on Wednesday, March 20, 2019, a company statement said.
As per the proposal PFC will acquire about 104 crore shares or 52.63 per cent of the government stake in the REC at Rs 139.50 per share, the PFC said in a regulatory filing.
The proceeds from the ETF sale will help the government move towards meeting the Rs 80,000 crore disinvestment target set for the current fiscal.
The upside momentum is likely to accelerate in the coming week once the Nifty crosses the 50-day SMA.
REC's cumulative foreign debt stands at around $1.85 billion which will mature in phases till 2028 and the state-owned company has initiated the exercise of obtaining the consent of these lenders.
Power Finance Corporation (PFC) is likely to close the deal by March 31 this year and is not considering extending open offer to the minority stakeholders, Verma said while addressing a media conference here.
There has been no finalisation on the deal value, the non-banking finance company said.