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Public enterprise REC Limited, formerly Rural Electrification Corporation Limited, has received shareholders' approval for the proposal to issue 65.83 crore bonus shares, utilising capital reserves of 658.3 crore.

The company in an exchange filing said that “two resolutions as set out in the Postal Ballot Notice dated July 8, 2022, of the Company have been approved by the shareholders with requisite majority." The resolutions were the approval to appoint Vivek Kumar Dewangan as its Chairman and Managing Director and to capitalize the reserves and issue Bonus shares to the shareholders of the company.

REC Ltd last month had announced that its board has recommended bonus shares issue in the ratio of 1:3 and also fixed the record date for the same.

“The Board of Directors has recommended the issue of bonus shares to the shareholders of the Company in the ratio of 1:3, i.e. one (1) bonus equity share of 10- each fully paid-up for every three (3) existing equity shares of 10- each fully paid- up to the eligible members, subject to the approval of shareholders through postal ballot," REC had informed in an exchange filing.

Further, the company has fixed record date for ascertaining entitlement of Thursday, August 18, 2022 eligibility of shareholders for bonus shares. Bonus shares are fully paid additional shares issued by a company to its existing shareholders.

The Board of Directors in its meeting held on June 30, 2022, had recommended the proposal for the issue of bonus shares as on the record date, by the capitalisation of a sum of 6,58,30,60,000 out of the sum standing to the credit of 'Securities Premium Account' of the company.

The said amount is proposed to be applied in full for the issue of 65,83,06,000 new equity shares of 10 each at par with bonus shares. Consequently, the paid-up capital of the company will increase to 2,633.22 crore - 2,63,32,24,000 equity shares of 10 each.

REC Limited is a Navratna company under the administrative control of the Ministry of Power. It funds its business with market borrowings of various maturities, including bonds and term loans apart from foreign borrowings, on its own. REC shares are down about 2% in 2022 so far.

 

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