Government on Friday said that it has approved the highest bid of Star9 Mobility Pvt Ltd for sale of its stake of 51 per cent in Pawan Hans Limited for Rs 211.14 crore. The transaction now moves to the concluding stage with the next steps being issue of the Letter of Award, signing of the Share Purchase Agreement and closing of the transaction.
As per extant procedure, the reserve price for Pawan Hans sale 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 Ministry of Finance said in an official statement.
Of these, Star9 Mobility Private Ltd, a consortium of Big Charter Private Limited, Maharaja Aviation Private Limited and Almas Global Opportunity Fund SPC, emerged as the highest bidder quoting Rs 211.14 crore, which was above the RP. The other two bids were for Rs 181.05 crore and Rs 153.15 crore.
The Cabinet Committee had approved the strategic disinvestment of PHL in October, 2016. The transaction had been attempted thrice in the past. In the first round, the Preliminary Information Memorandum (PIM) was issued on 13 October 2017 seeking Expressions of Interest (EOI). Out of four EOIs received, only one was found eligible and the transaction was cancelled. In the second round, PIM was issued seeking EOIs on 14 April, 2018 and two bidders were found eligible and were issued the Request for Proposal (RFP). Finally, however, a single, incomplete bid non-compliant with the RFP was received.
In the third round, PIM was issued seeking EOIs on 11 July 2019. Out of four EOIs received, only one was found eligible and the process was cancelled. This is the fourth iteration with request for EoI invited on 8 December 2020. Seven EoIs were received and four interested bidders were shortlisted as qualified bidders. After detailed due diligence, the qualified bidders were invited to submit financial bids.
Pawan Hans is a joint venture of Government of India and ONGC providing helicopter and aero mobility services. Government 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 strategic disinvestment transaction, on the same price and terms.
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.
PHL 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 ageing fleet through infusion of fresh capital and improve the performance of the company," the ministry added.
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