REC announces issuance of free shares in a ratio of 1:3 and sets record date

State-owned REC Limited, formerly Rural Electrification Corporation Limited, announced on Thursday that its board had recommended the issuance of free shares at a ratio of 1:3 and had also set a record date for the same thing.

“The Board of Directors has recommended the issue of free shares to the shareholders of the Company in a ratio of 1:3, i.e. one (1) free share of the capital of 10- each fully paid for three (3) existing capital shares of 10- each fully paid up to eligible members, subject to shareholder approval by mail-in vote,” REC advised in an exchange filing.

In addition, the company has set a closing date to record the right of Thursday, August 18, 2022 to the eligibility of shareholders for free shares. Free shares are additional fully paid shares issued by a company to its existing shareholders.

In the meantime, he also informed that the Board of Directors has set Wednesday, July 13, 2022 as the record date to determine the eligibility of members for the 2021-22 final dividend of 4.80 per share, subject to shareholder approval at the next AGM. In addition, the above dividend, if declared at the next AGM, will be paid to shareholders within 30 days of the date of the Annual General Meeting (AGM).

The balance of the dividend is added to the interim dividends of 10.50 per share already declared and paid during the year in three tranches, bringing the total dividend for the financial year 2021-22 to 15.30 per share, on the par value of 10 each.

The state-owned company REC Ltd recorded a 14% increase in its consolidated net income 2,301 crores in the March quarter, mainly due to higher revenues. The consolidated net profit of the company amounts to 2,017.8 crores in the quarter ended March 2021. Total revenue for the quarter increased to 9,653 crores of 9,215.9 crores in the same period a year ago.

REC Limited is a Navratna company under the administrative control of the Department of Energy. It finances its activities itself by borrowing on the markets of various maturities, including bonds and term loans, with the exception of foreign borrowings. REC shares are down about 9% in 2022 so far.

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Sallie R. Loera