Business strategy

Govt to Sell Stake at Pawan Hans to Star9 Mobility for Rs 211 Crore; Details Here

The central  government has approved the sale of its stake in helicopter services providing company Pawan Hans Ltd along with its management control to Star9 Mobility Pvt Ltd for an amount of Rs 211 crore, the finance ministry has said. In a press release on Friday, the government said that all participating ministries had “approved the highest bid of M/s Star9 Mobility Private Ltd for sale of entire GoI’s shareholding (51 per cnet of shareholding) of Pawan Hans Limited (PHL) and transfer of management control.”

As per the press release by the finance ministry, the stake sale was approved by the Cabinet Committee on Economic Affairs, comprising union ministers Nitin Gadkari, Nirmala Sitharaman, and Jyotiraditya Scindia. Star9 Mobility is a three-way consortium between Big Charter Private Limited, Maharaja Aviation Private Limited and Almas Global Opportunity Fund SPC.

The government’s approval of Pawan Hans disinvestment comes months after it sold Air India to Tata Sons for Rs 18,000 crore last year. This recent approval has enhanced the Centre’s portfolio in divesting its assets in the aviation sector.

Pawan Hans Limited is a joint venture of the government and and public sector oil company ONGC, providing helicopter and aero mobility services. The Centre holds 51 per cent of the shares in the company and ONGC holds the balance 49 per cent. “ONGC has earlier decided to offer its entire shareholding to the successful bidder identified in the GoI strategic disinvestment transaction, on the same price and terms as GoI,” the statement noted.

The sale of this asset will be functional in helping the Centre meet it targets of spending and meet its Budget targets as the economy of the country faces newer challenges with rising global tensions.

“As per extant procedure, the Reserve Price for sale of 51 per cent shareholding of PHL was fixed at Rs 199.92 crore, on the basis of valuation carried out by experts (transaction adviser and asset valuer). Thereafter, the three bids were opened in the presence of the bidders. All three bids were found to be valid,” the finance ministry said.

“M/s Star9 Mobility Private Ltd, a consortium of M/s Big Charter Private Limited, M/s Maharaja Aviation Private Limited and M/s Almas Global Opportunity Fund SPC; emerged as the highest bidder quoting Rs 211.14 crore, which was above the Reserve Price. The other two bids were for Rs 181.05 crore and Rs 153.15 crore. Following due deliberations, the financial bid of M/s Star9 Mobility Private Limited has been accepted by the Government,” it added.

The CCEA had approved the strategic disinvestment of entire government stake in PHL in October, 2016. The transaction had been attempted thrice in the past. The strategic disinvestment transaction was implemented through an open, competitive bidding process supported by a multi-layered consultative decision making mechanism involving Inter Ministerial Group, Core Group of Secretaries on Disinvestment and the empowered Alternative Mechanism, the government said.

Pawan Hans has been incurring losses in the last three years (FY-19, FY-20 and FY-21). The company has a fleet of 42 helicopters with 41 of them owned by the company. The owned helicopters have an average age of over 20 years and three-fourths of them are presently not being manufactured by the original equipment manufacturer. With this privatization, it is expected that the strategic buyer will revitalize the company by replacing the aging fleet through infusion of fresh capital and improve the performance of the company.

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