“The vision for NBFCs for Viksit Bharat has been outlined with clear targets for credit disbursement and technology adoption. In order to achieve scale and improve efficiency in the Public Sector NBFCs, as a first step, it is proposed to restructure the Power Finance Corporation and Rural Electrification Corporation,” Union Finance Minister Nirmala Sitharaman said in her budget speech.
The board of directors of PFC took note of the budget announcement and accorded its in-principle approval for restructuring in the form of a merger of PFC and REC, while ensuring that, the merged entity continues to remain as a “Government Company” under the Companies Act, 2013 and other applicable laws. The detailed merger scheme once finalised shall be shared after requisite approvals, PFC said in a stock exchange filing.
In a separate filing, REC said its board has accorded its in-principle approval to proceed with restructuring in the form of a merger of REC and PFC and to formulate a detailed merger proposal in accordance with applicable laws and regulations, ensuring that the merged entity continues to remain as a “Government Company” under the Companies Act, 2013 and other applicable laws. The detailed merger scheme once finalised shall be shared after requisite approvals, it said.
Pursuant to ‘In Principle’ approval of Cabinet Committee on Economic Affairs (CCEA), PFC acquired 52.63 per cent of the government’s holding in REC. Accordingly, PFC and REC are operating as holding and subsidiary companies.
