Ministry to seek Cabinet nod for REC's $1 bn FCCB issue

**New Delhi:**The power ministry will soon seek the Cabinet approval for Rural Electrification Corp.’s proposed $1 billion worth Foreign Currency Convertible Bonds (FCCBs) issue.

REC received the finance ministry’s approval for the proposal, a company official said.[caption id=“attachment_227062” align=“alignleft” width=“380” caption=“Power transmission. Reuters”] [/caption]

“The power ministry will soon float the Cabinet note for our proposed 1 billion FCCBs issue. We expect the issue to happen in the next fiscal,” said the official.

FCCBs is a kind of securities where the money is raised in a foreign currency and the holder also has the option to convert the bonds into equity shares of the company.

After the FCCBs issue, the stake of the government in REC is expected to come down to about 56.5%. The government’s shareholding stood at 66.8% at the end of December quarter.

A leading lender for the power sector, REC posted a profit of Rs 769.51 crore in last three months of December.

REC has also received approval from the finance ministry to raise up to Rs 3,000 crore through issue of tax-free bonds this fiscal. The issue is to hit the markets on 5 March and the proceeds would be mainly utilised for loan disbursements.

The company plans to raise about Rs 28,000 crore in the current fiscal and out of the total amount, Rs 23,000 crore has already been raised.

PTI