REC seeks Centre nod to raise Rs 3,000 crore
Jun 09 2009 2234 hrs IST , New Delhi Government-owned financer Rural Electrification Corporation (REC) plans to mop up Rs 3,000 crore through a dilution of 20 per cent equity. The company has sought the approval from the government to mobilise the funds from the equity market. As per the proposal put before the ministry of power, REC has expressed its willingness to go for a qualified institutional placement (QIP) or a follow-on public offer (FPO) to raise between Rs 2,500 crore to Rs 3,000 crore, a senior company official said on the condition of anonymity. "We have written to the power ministry seeking its approval. We have proposed both the options to the ministry, though we would prefer a QIP issue as its takes lesser time than a follow-on public issue. The average interest rates have also come down to about 8.5 per cent for a 10-year loan as against about 12 per cent in last financial year," the official said. Alternatively, REC proposes to offload up to 20 per cent through equity sale, which could mean an issue size of 17 crore shares. “Whether it would lead to disinvestment of the Centre’s equity or not depends on the government’s approval,” the official said. Government holds 81.8 per cent in the company. QIP refers to issue of securities such as equity shares, convertible debentures or warrants to qualified institutional buyers (QIBs). FPO refers to fund mobilisation through public issue by a listed company. REC got listed in March last year through an initial public offering that raised Rs 1,640 crore. It had offloaded 18.81 per cent equity through the issue. The scrip closed at Rs, 157.50, up 6.45 per cent, on the Bombay Stock Exchange on Tuesday. The fund raising will help REC in meeting its business obligations, which involve lending to companies in the power sector. The company has plans to lend Rs 30,000 crore in the present financial year. The company has so far picked up about Rs 6,000 crore from the market --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
