REC enters Distribution zone with a bang

Bangalore, Oct 3(UNI) Rural Electrification Corporation, a leading public sector financial insitution in the 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 ranking official of the company told UNI that REC Power Distribution Company which commenced business on July 31 had already in bag orders worth Rs 1500 crore for providing consultancy services for efficient implemention of feeder services. The Distribution company would also be providing energy audit and check on power losses, the official said adding that for the current fiscal the new Company would be looking forward for order worth Rs 8000 crore as talks were on with several states.

He said that 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 also emerged a major player in the generation sector also having financed seven projects to the tune of Rs 8000 crore.

The Company is also 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. However in view of the restrictions on ECB by the RBI the proposal is 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