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Power Finance Corp (PFC) has got shareholders’ approval for raising up to ₹ 55,000 crore via issue of securities.
PFC, one of the leading lenders to the power sector, also got nod for raising its borrowing limit to ₹4 crore at the company’s annual general meeting held yesterday.
A special resolution listed for seeking approval for raising funds by way of private placement of bonds/debentures/notes/debt securities in India and/or outside the country to the extent of ₹ 55,000 crore during the period of one year from the date of current AGM (August 19, 2016) was passed, stated PFC in a BSE filing today.
The company has also got shareholders’ nod to raise ₹ 5,000 crore by issuance of bonds for Power Ministry in addition to its total borrowing limit to ₹4 lakh crore.
PFC’s shareholders also approved the proposal to increase the authorised share capital from ₹2,000 crore, comprising of 200 crore equity shares of ₹10 each to ₹ 10,000 crore comprising of 1,000 crore equity shares of ₹ 10 each.
The shareholders also approved the resolution to capitalise ₹ 1,320.04 crore out of the sum standing to the credit of ‘Securities Premium Account’ of the company for the purpose of issue and allotment of one equity share for every one eligible existing fully paid equity share.
The latest ‘Guidelines on Capital Restructuring of Central Public Sector Enterprises (CPSE) stipulates norms to be followed by CPSEs for issue of bonus shares.
These norms provide that every CPSE shall issue bonus shares if its defined reserves and surplus is equal to or more than 10 times of its paid-up equity share capital.
Defined reserves and surplus means free reserves, the share premium account, and the capital redemption reserve account.
As on March 31, 2016, the paid-up share capital of PFC’s defined reserves and surplus were ₹ 1,320.04 crore and ₹19,531.83 crore, respectively.
Accordingly, the company is required to come out with bonus issue of shares in compliance with the said guidelines.
PFC, an infrastructure finance company, is engaged in providing financial assistance to state power utilities for meeting the financing and development requirements of the power sector.
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