Insta
REC Gets A New Boss: Cabinet Gives In Principle Approval For Power Finance Corporation Acquisition
PM Modi with FM Arun Jaitley. (Virendra Singh Gosain/Hindustan Times via Getty Images)
Union Cabinet of Economic Affairs, headed by PM Modi, has cleared the Rs 14,000 crore takeover of Rural Electric Corporation (REC) by Power Finance Corporation (PFC) on Thursday (6 December 2018), as reported by Economic Times (ET).
Both the entities are state-run PSUs (Public Sector Units) under the Union Ministry of Power, and while PFC is the financial backbone of India’s power sector, REC is a significant player in the rural electrification space.
“(The Cabinet) has given its ‘In Principle’ approval for strategic sale of the Government of India’s existing 52.63 per cent of total paid-up equity shareholding in Rural Electrification Corporation (REC) to Power Finance Corporation (PFC) along with transfer of management control,” a press release statement by the government noted.
This merger is part of NDA government’s broader objective of raising around Rs 20,000 crore by selling government stakes in such PSUs to other larger government-controlled companies. Apart from the REC-PFC merger, govt will also sell its stake in SJVN Ltd to NTPC (National Thermal Power Corporation).
“The acquisition intends to achieve integration across the Power Chain, obtain better synergies, create economies of scale and have enhanced capability to support energy access and energy efficiency by improved capability to finance power sector,” the statement added.
Also Read: Why PFC’s Acquisition of REC Is A Bad Idea
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.
Latest
