Centre accepts Star9 Mobility’s ₹211 cr bid for loss-making Pawan Hans

The central government today approved the ₹211 crore bid of Star9 Mobility Pvt Ltd -- a consortium of three companies -- for strategic disinvestment of Pawan Hans Limited. Pawan Hans is a joint venture of GoI and ONGC, providing helicopter and aero mobility services.

The finance ministry, in a release today, said the alternative mechanism empowered by the Cabinet Committee on Economic Affairs has approved the highest bid of Star9 Mobility Private Ltd for the sale of entire government shareholding (51% of shareholding) of Pawan Hans Limited (PHL) and transfer of management control.

Finance minister Nirmala Sitharaman, transport minister Nitin Gadkari and civil aviation minister Jyotiraditya Sinha are the members of the alternative mechanism on disinvestment.

"The reserve price for the sale of 51% shareholding of PHL was fixed at ₹199.92 crore, on the basis of valuation carried out by experts (transaction adviser and asset valuer). Three bids were opened in the presence of the bidders. All three bids were found to be valid," said the ministry release.

"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 ₹211.14 crore, which was above the reserve price. The other two bids were for ₹181.05 crore and ₹153.15 crore. Following due deliberations, the financial bid of Star9 Mobility Private Limited has been accepted by the government," said the release.

Notably, Pawan Hans Ltd has been incurring losses in the last three financial years (FY19, FY20 and FY21) and the strategic sale process could be fructified only in the fourth attempt. The company has a fleet of 42 helicopters.

The strategic disinvestment of PHL was approved by the Cabinet in October 2016. The transaction had been attempted thrice in the past. In the first round in 2017, out of four expressions of interest received, only one was found eligible and the transaction was cancelled.

In yet another attempt in 2018, two bidders were eligible and were issued the Request for Proposal (RFP). But a single, incomplete bid, non-compliant with the RFP, was received. In the third attempt in 2019, out of four EOIs received, only one was found eligible and the process was cancelled. In the current round initiated on December 8, 2020, seven EoIs were received and four interested bidders were shortlisted as qualified bidders who were invited to submit financial bids.

The balance 49% stake in Pawan Hans is held by ONGC, which has earlier decided to offer its entire shareholding to the successful bidder identified by the government in a strategic disinvestment transaction, on the same price and terms as the central government.