What is the main business of Pawan Hans and how significant is the company for the industry it operates in? 

Pawan Hans (PHL) was set up on October 15, 1985 as a public sector undertaking to primarily provide helicopter services for the exploration activities of Oil and Natural Gas Corporation Limited (ONGC) and to the North-East Region. It now claims to be South Asia’s largest helicopter company, with a fleet of 43 helicopters. It provides a variety of services, making it the most trusted brand in this area.

Off-shore operations, connecting inaccessible areas, charter services, search and rescue work, VIP transportation, corporate and special charters, hotline washing of insulators and Heli-pilgrims are some of the other major services offered. 

When did the divestment of Pawan Hans begin and how has it been progressing? 

PHL is a joint venture of Central Government and ONGC. The government holds 51 per cent stake in the company and ONGC holds the balance. ONGC earlier decided to offer its entire shareholding to the successful bidder in the disinvestment process on the same price and terms of the government. 

The Cabinet Committee on Economic Affairs (CCEA) had approved the strategic disinvestment of entire Government stake in PHL in October 2016. The transaction had been attempted thrice in the past. In the first round, out of four EOIs received, only one was found eligible and the transaction was cancelled. In the second round, 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, out of four EOIs received, only one was found eligible and the process was cancelled. For the fourth time, EoI was invited on December 8, 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. Three financial bids were received. After detailed evaluation, Star9 Mobility Private Ltd, a consortium of Big Charter Private Limited, Maharaja Aviation Private Limited and Almas Global Opportunity Fund (AGOF), emerged as the highest bidder quoting ₹211.14 crore, which was above the Reserve Price. However, Letter of Intent (LOI) was not issued considering adverse order by NCLT. 

What were the grounds for calling off the disinvestment? 

Adverse orders of NCLT and NCLAT and complaint by IBBI against a consortium member, AGOF led to initiation of the process to disqualify the successful bidder with show cause notice. Based on the response, the government disqualified Star 9 Mobility Pvt Ltd. Also, EoI process for strategic disinvestment was annulled. 

What next for Pawan Hans? Will there be another round of bidding? 

As on date, there is no indication of any development in the strategic disinvestment process. 

What does this setback mean for the Centre’s divestment for FY24? What are the other divestment plans in the pipeline? 

The government has set a target of ₹51,000 crore to be mobilised through all forms of disinvestment and till date, it has managed to collect over ₹4,200 crore (mainly from selling part of its stake in Coal India). The disqualification of successful bidder in PHL, after four attempts, is certainly a setback and the second case of disqualification after Central Electronics.

However, the government hopes to complete strategic disinvestment of IDBI Bank, Shipping Coproration and CONCOR beside some others. 

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