Fitch affirms REC

Fitch Ratings said it affirmed REC Ltd.'s long-term foreign and local currency issuer default ratings at BBB-. The outlook is stable.

Fitch also affirmed REC's outstanding senior unsecured issues at BBB-.

Power Finance completed the acquisition of the Indian government's 52.63% stake in REC. The transaction was driven by the government's plan to divest government-related entities to raise funds and create potential synergies between REC and Power Finance, which have similar businesses.

Fitch said it does not differentiate the attribute strength between REC and Power Finance, in view of the inter-connected shareholding.

The agency said it believes the government's direct involvement in the Power Finance transaction demonstrated a very high level of control over REC, which may make it difficult for the government to dissociate from expectations that extraordinary state support would be extended to the combined group, should it be needed.

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