Centre's disinvestment boost: PFC to buy REC
In order to meet the disinvestment target of ₹ 80,000 crore for this financial year, the Cabinet Committee on Economic Affairs has given an in-principal approval for the strategic sale of 52.63% stake in Rural Electrification Corporation (REC) to Power Finance Corporation (PFC) along with transfer of management control. The proposed deal is likely to fetch the government around ₹15,000 crores and after the closure of the deal, REC will become a subsidiary of PFC. The proposed deal is similar to the one where Oil and Natural Gas Corporation (ONGC) acquired the government's entire 51.11% stake in oil refiner Hindustan Petroleum Corporation last year for nearly ₹37,000 crores. The upstream state-owned oil behemoth financed the deal with market borrowing of ₹25,000 crores. Also, the proposed deal will be along the lines of government's idea to create large public sector companies by consolidating companies based of common factors and functions. In an otherwise stressed secto...