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Power Finance Corp may launch FPO in April-May next year

Power Finance Corp may launch FPO in April-May next year
PTI
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First Published: Tue, Nov 30 2010. 04 53 PM IST
Updated: Tue, Nov 30 2010. 04 53 PM IST
New Delhi: State-run Power Finance Corporation might come out with a 20% follow-on public offer in April- May next year if the Department of Disinvestment clears a proposal floated by the power ministry.
The power ministry has proposed disinvestment of 5% of the Centre’s stake in the public sector finance institution, as well as the issue of 15% fresh equity, through the FPO route.
“The power ministry has sent a proposal for a 15% fresh equity and 5% disinvestment of government stake in PFC,” Department of Disinvestment secretary Sumit Bose told reporters here.
“The company needs funds, that’s why they have asked for a bigger share of fresh equity,” Bose 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 (FPO) is likely to be launched in April-May next year, according to sources.
At present, the government holds a 89.78% stake in the firm. It had divested a 10% stake through an initial public offer in 2007.
The government, which hopes to raise Rs40,000 crore through its disinvestment programme this fiscal, has already mopped up close to Rs20,000 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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First Published: Tue, Nov 30 2010. 04 53 PM IST