The proposed merger, to be carried out under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, is expected to create one of India's largest power sector financing entities, with a combined loan book exceeding ₹11 lakh crore.
According to a joint statement, the Scheme remains subject to several conditions, including approvals from the shareholders and creditors of both companies, as well as all relevant regulatory and government authorities. The merger is also contingent on the combined entity continuing to qualify as a Government Company under the Companies Act, 2013, with the Government of India retaining majority voting rights and control, either directly or indirectly.
As per the approved Scheme and the valuation report, REC shareholders will receive 88 fully paid-up equity shares of PFC (face value ₹10 each) for every 100 fully paid-up equity shares of REC (face value ₹10 each). The share exchange will be based on a record date to be determined by the Boards of PFC and REC at a later stage.