New Delhi: The Union cabinet on Thursday approved the sale of government’s shareholding in RECLtd to Power Finance Corporation (PFC) along with transfer of management control, in a deal estimated to raise over Rs 14,000 crore.

“The cabinet committee on economic affars has given ‘in principle’ approval for strategic sale of the government of India’s existing 52.63% of total paid up equity shareholding in REC to Power Finance Corporation along with transfer of management control,” finance minister Arun Jaitely said in a briefing after the cabinet meet.

The two will remain two different management companies, he said. 

The acquisition intends to achieve integration across the power chain, obtain better synergies, create economies of scale and have enhanced capability to support energy access and energy efficiency by improved capability to finance power sector. It may also allow for cheaper fund raising with increase in bargaining power for the combined entity, an official statement said. 

Jaitley said a ministerial committee constituting himself, power minister R K Singh and road transport minister Nitin Gadkari will work out modalities of the acquisition based on recommendations submitted by a committee of secretaries.