PFC to fund REC deal without flouting CAR norms: Rajeev Sharma

NEW DELHI: Power Finance Corp (PFC) will fund the acquisition of REC Ltd majorly through its internal accruals and expects to receive sanctions from about four state-run banks for up to Rs 6,000 crore in a week.

The company is confident of financing the Rs 14,000-crore deal without breaching capital adequacy norms and signing the share purchase pact within next 20 days, its managing director, Rajeev Sharma, told ET.

Power Finance Corp has scheduled an extraordinary general meeting on March 19 and expects to make an offer to the government a couple of days thereafter. “We will be able to comfortably fund the buyout and yet maintain a healthy capital adequacy ratio,” Sharma said, adding the company has also begun to liquidate its investments in shares of other PSUs at fair value.


PFC has secured regulatory clearance from Securities Exchange Board of India, Competition Commission of India and Reserve Bank of India for the deal.