MUMBAI: It is business as usual at the Power Finance Corporation (PFC) and the impending merger with the Rural Electrification Corporation (REC) has not put any hurdles in its ability to either raise resources or on its disbursals, the top company management said in Mumbai, addressing a press conference.
To bolster the case for PFC-REC merger, which rating agencies had put on watch, officials from the ministry of power, as well as the DIPAM (Department of Investment and Public Asset Management), joined to say that they do not see any case for weakened financials due to the merger.
PFC-REC merger is expected to be completed by the end of the current financial year, March 31, 2019, and PFC as a holding company and REC under it till the merger would continue to be public sector enterprises, Arun Kumar Verma, joint secretary, Ministry of power said. But, PFC would not be required to make an open offer to the other shareholders of REC, the officials said.
On the issue of PFC’s disbursals, Rajeev Sharma, chairman and managing director PFC said, “Strongly rebut the media reports that we are not releasing disbursements”.
He said December quarter disbursements had grown 34 per cent on year to Rs 14,600 crore. Without giving a number for the ongoing quarter, Sharma said he expects growth to sustain and it is business as usual.
Sharma said the valuation for REC is being done by DIPAM, and PFC is also independently getting the valuation done and that a transaction has not been arrived at yet. He said the deal would be funded through debt, and that it is already in discussion with the lenders. Sharma also said the company was in continuous dialogue with the credit rating agencies to keep them informed on the deal, and that the firm would meet necessary capital adequacy levels.
Mittal offers to buy Essar Mahan project
Global steel giant ArcelorMittal has offered to pay I4,800 crore to buy the stressed Essar’s Mahan Power project, considerably higher than the I3,500 crore offer by Essar, PFC chairman Sharma said.
PFC is considering the ArcelorMittal’s offer as it is willing to pay I4 crore per megawatt, Sharma said. Essar Group’s coal-based Mahan project in Madhya Pradesh has a generation capacity of 2x600 MW but does not have fuel supply agreement or power purchase agreement.
The outstanding loan is around I7,500 crore, Sharma said. ArcelorMittal has also won the bid to buy Essar Steel under the IBC process.