Shares of state-owned Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) were trading lower Thursday ahead of the Cabinet meeting today to consider merger deal.
The Cabinet on Thursday will consider the proposal for PFC acquiring entire government stake in REC, which will fetch the government approx Rs 15,000 crore.
Ahead of the cabinet meeting, shares of New Delhi-headquartered PFC fell as much as 3.46 per cent to Rs 89.10 apiece on the BSE, after making a negative start at Rs 92.00. On Wednesday PFC shares closed 5.33 per cent down on the BSE at Rs 92.30.
On the National Stock Exchange, stocks of company were trading at Rs 90.60, down 1.84 per cent. REC slipped as much as 1.52 per cent to Rs 103.50, falling 1.2 per cent in the previous session, after government reversed its initial decision to sell PFC to the company.
According to data available with exchange, the government holds 65.64 per cent stake in PFC and 57.99 per cent in REC at the end of the September quarter.
"The proposal is PFC will acquire 52.63 percent government stake in REC, along with transfer of management control. A final call will be taken by (the) Cabinet on Thursday," PTI quoted a source as saying. At the previous day closing price of Rs 105.10, sale of 52.63 per cent government stake in REC will fetch around Rs 11,000 crore to the exchequer.
Initially, government was planning to sell PFC to REC. However, on Wednesday the power ministry proposed PFC buying 52.63 percent government stake in REC. The government hopes that acquisition will create a larger entity with an enhanced balance sheet and provide higher value loans as well as remove duplication of work, according to the agency.