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Govt mulls 15% FPO in Power Finance Corp

A proposal regarding the same was sent last week to the Department of Disinvestment by the power ministry. The ministry is seeking 15 per cent fresh equity for the firm.

twitter-logoPTI | November 30, 2010 | Updated 17:37 IST

The government on Tuesday said it is considering a 15 per cent follow-on-public offer (FPO) of Power Finance Corporation (PFC), a proposal sent by the power ministry last week.

"The power ministry has sent a proposal for 15 per cent fresh equity and five per cent disinvestment of government stake in PFC," Disinvestment Secretary Sumit Bose told reporters here.

The company needs funds and has, thus, asked for a bigger share of fresh equity, he added.

Power Finance Corporation, which is engaged in funding power generation, transmission and distribution projects across the country, plans to use the funds mopped up from the FPO to finance both existing loans, as well as future lending activities.

The follow-on public offer is likely to be launched in April-May next year, according to sources.

At present, the government of India holds a 89.78 per cent stake in the firm. It had divested a 10 per cent stake through an initial public offer in 2007.

The government, which hopes to raise Rs 40,000 crore through its disinvestment programme this fiscal, has already mopped up close to Rs 20,000 crore through the sale of stakes in PSUs Satluj Jal Vidyut Nigam, Engineers India Ltd, Coal India Ltd and PowerGrid Corporation.

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