REC enters distribution zone in a big way

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Bangalore, Oct 3 (UNI) The Rural Electrification Corporation (REC), a leading public sector financial institution in power sector, has entered the distribution zone in a big way and aim to join hands with the private sector players as a joint partner.

With over Rs 13,700 crore approvals last year on an equity base of only Rs 4,000 crore, REC is competing fiercely with the Power Finance Corporation in tapping the vast potential the sector had to offer for investment.

A top official of the company told UNI that REC Power Distribution Company, which commenced business on July 31 had already bagged orders worth Rs 1,500 crore for providing consultancy services for efficient implementation of feeder services.

The company would also be providing energy audit and check on power losses, the official said, adding for the current fiscal the new company would be looking forward for order worth Rs 8,000 crore as talks were on with several states.

He said the company was not averse to join hands with private distribution companies such as Crompton and Greaves, Torrent, Reliance and Tata besides taking offer loss making state distribution units and turn them into viable ones.

REC had emerged a major player in the generation sector and also financed seven projects to the tune of Rs 8,000 crore.

The company was mulling to provide moratorium on interest to some of the beneficiary states during the tenure of the distribution networks for a period of around two years. The scheme, however, was not in place yet.

The company, which raised 200 million Dollars in External Commercial Borrowings (ECB) last year had applied to the RBI for a another trance of ECB. In view of the restrictions on ECB by the RBI the proposal was not yet through.

However, it had filed a Draft red herring prospectus before SEBI for issue of 156,120,000 equity shares of Rs 10 each on 100 per cent book building basis with 50 per cent of it being fresh equity.

The issue would constitute about 18.18 per cent of the fully diluted post issue capital of REC.

UNI

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