Merger Approval
The Boards of Power Finance Corporation Ltd (PFC) and REC Ltd (REC) have approved a Scheme of Merger under Sections 230‑232 of the Companies Act, 2013, whereby REC (the Transferor) will be merged into PFC (the Transferee).
Combined Entity Scale
The merger will create a financing entity with an aggregate loan book exceeding INR 11 lakh crore.
Share Exchange Ratio
Shareholders of REC will receive 88 equity shares of PFC (₹10 each, fully paid) for every 100 equity shares of REC (₹10 each, fully paid). The record date for determining eligible REC shareholders will be set by the Boards of PFC and REC at a future date.
Conditions and Approvals
The Scheme is conditional upon receipt of all required approvals and consents under applicable law, including shareholder and creditor approvals, and clearances from relevant regulatory and governmental authorities. The merged entity must continue to qualify as a ‘Government Company’ under the Companies Act, 2013, with the Government of India retaining majority voting rights and control, either directly or indirectly.
Advisors and Opinions
Deloitte Touche Tohmatsu India LLP has been appointed as Transaction and Tax Advisor, and Cyril Amarchand Mangaldas as Legal Advisor to both PFC and REC. RBSA Valuation Advisors LLP (appointed by PFC) and Ernst & Young Merchant Banking Services LLP (appointed by REC) have prepared joint valuation reports. Fairness opinions on the valuation have been provided by SBI Capital Markets (for PFC) and Nuvama Wealth Management (for REC).
Disclaimer
The information is released as a press release; PTI assumes no editorial responsibility.