State-run Power Finance Corp (PFC) will seek shareholders’ approval for raising up to Rs 55,000 crore via issue of securities at the company’s annual general meeting scheduled on August 19, 2016.
PFC, which is a one of the leading lenders to the power sector, has also sought shareholders’ nod for raising its borrowing limit to Rs four lakh crore.
A special resolution is listed for seeking “approval for raising of funds by way of private placement of bonds/debentures/notes/debt securities in India and/or outside India to the extent of Rs 55,000 crore during the period of one year from the date of current AGM (August 19, 2016),” PFC said in a BSE filing today.
The company would also need shareholders’ approval to raise Rs 5,000 crore by issuance of bonds for Power Ministry in addition to its total borrowing limit of Rs four lakh crore.
PFC will seek shareholders’ approval for increase in the authorised share capital from Rs 2,000 crore, comprising of 200 crore equity shares of Rs 10 each to Rs 10,000 crore comprising of 1,000 crore equity shares of Rs 10 each.
The resolution will seek approval from shareholders to capitalise Rs 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 & surplus were Rs 1,320.04 crore and R 19,531.83 crore respectively.
Accordingly, the company is required to come out with bonus issue of shares in compliance with the said guidelines, it said.
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.