CorporateCorporate finance

Power Finance Corp 5 percent stake on sale


New Delhi:(IANS) The central government has set a floor price at Rs.254 per equity share for divestment of 5 percent of its stake in Power Finance Corp (PFC) on Monday.

“The floor price of the offer shall be Rs.254 per equity share of Power Finance Corporation (PFC),” the company said in a stock exchange filing.

The government holds 72.80 percent equity in the company, while the stake sale is expected to garner around Rs.1,600 crore.

The floor price of Rs.254 is at a discount of 2.14 percent over Friday’s closing price of the stock at Rs.259.55.

PFC would be the second such sale this fiscal by the government after divesting stock in REC in April.

Meanwhile, Friday was also the deadline for merchant bankers and legal advisors, bidding for being appointed for the stake sale by the government in 10 public sector undertakings (PSUs), to submit their bids to the department of disinvestment (DoD).

A finance ministry source here told IANS that the DoD had earlier this month  invited proposals for appointing merchant bankers for up to three years for the  proposed stake sales in 10 state-run companies – Oil India, Container Corp,  NMDC, MMTC, ITDC, NTPC, Engineers India, BEL, Nalco and Hindustan Copper.

The government has informed the interested bankers that the time taken for actual completion of transaction will depend on the market and other related conditions, the source said.

While the 10 companies have been divided into two baskets, the DoD would appoint four merchant bankers for each basket, he added.

Moreover, to prevent any conflict of interest, the merchant bankers have to certify that they are not advising or acting on behalf of any other person or entity which is engaged in the same line of business as that of each of the company constituting the basket being disinvested.

The government has an ambitious disinvestment target of Rs.41,000 crore through stake sale in public sector units, and another Rs.28,500 crore through strategic stake sale by transfer of management control, during the current fiscal.

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