COMPANIES IN NEWS

Power companies feel divestment may increase cost of borrowings

NTPC Ltd, Power Grid Corporation of India (PGCIL) and Power Finance Corporation (PFC) have conveyed their concerns on the government’s proposal to reduce stake to below 51%.

The companies have told the ministry of power that reducing government shareholding below 51% may not go down well with existing investors, particularly foreign lenders, according to people in the know.

Currently, the government holds 54% in NTPC, 54.96% in PGCIL and 56% in PFC. In case of NTPC and Power Grid Corp, government shareholding will fall to 51% as the Centre plans one round of divestment within this financial year through the exchange-traded funds (ETF) route, the people cited above said.

Government stake in PFC is expected to fall to 42% after the merger of its subsidiary, REC Ltd, with Power Finance Corporation.

On November 21, the Cabinet Committee on Economic Affairs had given its in-principle clearance to reduction of the government’s stake in select public sector units to 51%, while retaining management control on case-tocase basis, taking into account the government shareholding, and the shareholding of government-controlled institution.

“Post such reduction, government’s control will remain intact and, while retaining the management control, on a case-to-case basis decision will be taken,” finance minister Nirmala Sitharaman had said.

Source
The Economic Times
Tags
Show More

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button
Close
Close