Cyril Amarchand Mangaldas has acted as the transaction counsel for merger by absorption of REC Limited into Power Finance Corporation Limited, and the consequent dissolution of REC without being wound up and on a going concern basis.
The Firm advised both Power Finance Corp and REC on this merger. The deal involved extensive discussions with the Ministries and other governmental authorities to finalise the scheme and the overall structuring of the Proposed Merger.
The transaction was led by Amey Pathak (Partner, Head - Banking) and Dhruv Singhal (Partner), with assistance from Deval Dangayach (Senior Associate), Hina Tolani (Senior Associate), Divisha Sharma (Associate), Shivi Chola (Associate), and Rituraj Parmar (Associate).
Pururaj Bhar (Partner), with assistance from Apoorv Jain (Principal Associate) and Utkarshini Anand (Associate), advised on banking and finance aspects.
Shikha Tandon (Partner), with assistance from Zaid Drabu (Principal Associate), advised on disputes aspects of the transaction.
Gazal Rawal (Partner), with support from Mrs. Lily Vadera (Senior Regulatory Advisor) and Mr. S. Ganesh Kumar (Senior Regulatory Advisor), Havish Gotecha (Senior Associate), and Aniket Panchal (Associate), advised on the RBI related regulatory aspects of the transaction.
The Merger of REC into PFC constitutes the merger of two of “Maharatna” Central Public Sector Enterprises and India’s largest public sector NBFCs, both being the primary financiers of India’s power sector, and both the Companies also forming part of NIFTY 100 and BSE 100 index. The Proposed Merger shall create a financing entity with an aggregate loan book exceeding INR 11 lakh crore, and the combined entity is valued at approximately ₹2.42 lakh crores.
The scheme is conditional upon and subject to, inter alia: (i) receipt of all requisite approvals and consents required under applicable law including, approvals from the respective shareholders and creditors of both the companies, and all relevant regulatory and governmental authorities, including RBI, SEBI, Ministry of Corporate Affairs and the Cabinet Committee on Economic Affairs (CCEA) (as applicable); and (ii) PFC (as the merged entity) continuing to qualify as a ‘Government Company’ under the Companies Act, 2013 and the Government of India continuing to retain majority voting rights and control in PFC (directly or indirectly).
If you would like your Deals, Columns, Press Releases to be published on Bar & Bench, please fill in the form available here.