PFC-REC Merger Approved! Here’s which company is merging into which and the share exchange ratio.

There is major news for investors in public sector companies. The boards of Power Finance Corporation (PFC) and REC have approved the scheme for the merger of the two companies. Following the merger, REC will cease to exist as a separate entity and will be merged into PFC. The biggest question now is: what happens if you hold REC shares?

What will REC shareholders receive?

According to the merger scheme, 88 equity shares of PFC will be issued for every 100 equity shares of REC. In other words, there will be no cash payout; instead, there will be a share exchange.

To illustrate with examples…

If you hold 100 REC shares, you will receive 88 PFC shares. If you hold 500 REC shares, you will get 440 PFC shares in return. If you hold 1,000 REC shares, you will be issued 880 PFC shares.

However, this process will be completed only after all necessary regulatory and other approvals are obtained and the record date is announced.