The boards of Power Finance Corporation Limited (PFC) and REC Limited (REC) have approved a scheme for the merger of REC into PFC under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The proposed merger is expected to create a financing entity with an aggregate loan book of over Rs 11 trillion.
The merger remains subject to the required statutory, regulatory and government approvals, including approvals from the shareholders and creditors of both companies. It is also conditional on the merged entity continuing to qualify as a government company under the Companies Act, 2013, with the Government of India retaining majority voting rights and control. Under the approved share exchange ratio, REC shareholders holding shares on the record date will receive 88 fully paid-up equity shares of PFC of face value Rs 10 each for every 100 fully paid-up equity shares of REC of face value Rs 10 each. The record date will be decided later by the boards of PFC and REC, as applicable.