The proposed purchase of the Centre’s 52.63% stake in REC by state-run Power Finance Corporation (PFC) is facing a hurdle with the latter putting a ceiling of `12,000 crore for its transaction cost, against `15,000 crore the government hopes to garner from the deal, sources told FE. The current market price of the Centre’s stake in REC is worth `14,300 crore (on the BSE).
The deal, which was expected to close by February end, is facing delays also because REC’s dollar bondholders are yet to commit to forgo their rights to sell the bonds back to REC if the government ownership falls below 50%. On REC’s overseas debt outstanding of $1.8 billion, the bondholders are demanding $150 million in fees for the waiver, much higher than the offer made by REC, said one official aware of the matter.
