The Telegraph
Since 1st March, 1999
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Panel for 49% selloff in PFC

New Delhi, Aug. 5: The Disinvestment Commission today recommended sale of a 49 per cent stake in the state-owned Power Finance Corporation (PFC) to a minority partner.

The development finance organisation should continue to remain within the government fold for some more time while roping in a minority partner with a 49 per cent stake along with a say in the management of the company, the commission has said in its latest report.

The report said PFC should engage only in financing of power sector assets on commercial terms based on techno-economic considerations. It said spreading of the risk beyond power sector and taking state government guarantees should not be encouraged.

PFC should be discouraged from entering into borrowing arrangements which recognise government support for its operations, the commission said.

The corporationís foray into short-term financing like working capital finance, while the clientele is facing cash deficit, is not healthy, it noted. Such activity cannot be considered viable and sustainable and should be discontinued.

The commission has also favoured privatisation of Water and Power Consultancy Services (Wapcos) as also the National Film Development Corporation (NFDC).

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