The Boards of Directors of Power Finance Corporation Limited (PFC) and REC Limited (REC) have approved a scheme to merge REC (the transferor company) into PFC (the transferee company) under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, along with their respective shareholders and creditors. The merger of REC into PFC will create a financing entity with a combined loan book of over Rs 11 lakh crore. The scheme is subject to receipt of all approvals and consents required under applicable law, including approvals from the respective shareholders and creditors of both companies and all relevant regulatory and governmental authorities. The merged entity is required to continue to qualify as a Government Company under the Companies Act, 2013, and the Government of India is to retain majority voting rights and control (directly or indirectly) in the merged entity. As per the scheme and valuation report, the share exchange ratio provides for the issue of 88 equity shares of PFC (of Rs 10 each) for every 100 equity shares of REC (of Rs 10 each), to be issued to REC shareholders on a future record date determined by the Boards of PFC and REC as applicable. Deloitte Touche Tohmatsu India LLP is acting as transaction and tax advisor and Cyril Amarchand Mangaldas as legal advisor for both PFC and REC. RBSA Valuation Advisors LLP (appointed by PFC) and Ernst & Young Merchant Banking Services LLP (appointed by REC) provided the joint valuation report, while SBI Capital Markets (PFC) and Nuvama Wealth Management (REC) provided their respective fairness opinions.