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Image Credit- The Indian Express, Pawan Hans Ltd
Pawan Hans Disinvestment: Govt Approves Star9 Mobility Bid To Buy 51% Stake For Rs 211 Cr
Writer: Yukta Baid
She is a postgraduate student of Journalism at SIMC Pune, passionate about exploring and reporting different beats with an objective view. Keen interest in, but not limited to, lifestyle and culture. I hold a triple major in English, Psychology, and Journalism. It's always easier to find stories over a cup of coffee.
India, 5 May 2022 10:49 AM GMT
Editor : Shiva Chaudhary |
A post-graduate in Journalism and Mass Communication with relevant skills, specialising in content editing & writing. I believe in the precise dissemination of information based on facts to the public.
Creatives : Shiva Chaudhary
A post-graduate in Journalism and Mass Communication with relevant skills, specialising in content editing & writing. I believe in the precise dissemination of information based on facts to the public.
This comes after three failed attempts of disinvestment since the government's decision to sell off its stake in 2016. An inflow of criticism has taken over, with several questions targeting the government.
The Central Government has confirmed approval of Star9 Mobility Pvt Ltd's bid of Rs 211.14 crores, the highest for the sale of 51 per cent stake in Pawan Hans Ltd, a helicopter-service provider. This comes after three failed attempts of disinvestment since the government's decision to sell off its stake in 2016.
The Department of Investment and Public Asset Management (DIPAM) approved the winning bid for the 37-year-old company on April 29, 2022. It sold its 51 per cent stake and management control to Star9 Mobility Pvt Ltd. for Rs 211.14 crores, which was higher than the reserve price set at Rs 199.92 crores, as per the PIB press release.
An inflow of criticism has taken over, with questions about the government's intentions, the players involved, the low bid at which Pawan Hans was sold, and the reasons why an ONGC merger wasn't considered.
New Player In Market
Star9 Mobility Pvt Ltd is a 6-month-old consortium of Big Charter Pvt Ltd, Almas Global Opportunity Fund SPC, and Maharaja Aviation Pvt Ltd. Since it is a relatively new company, Star9 Mobility doesn't own any helicopters of its own. Even Big Charter Pvt Ltd has just three helicopters to its name. Almas Global has no experience in this field either, and it comes under the jurisdiction of the Cayman Islands.
According to Star9 Mobility's MoU, it plans to facilitate air support services for the petroleum sector, including ONGC. Additionally, it intends to operate tourist charters and undertake any operation or role that might be required or directed by the Government, as reported by The Indian Express.
Big Opportunity?
Industry veterans believe that the privatisation of Pawan Hans might prove to be a push for the civil helicopter industry, as it would increase competition and enhance the market structure.
Additionally, it might expand technical capabilities, performance and overall quality of service, as private players would be less likely to award them contracts as easily as government agencies did, reported Business Today.
Criticism and Unanswered Questions
After the winning bid was approved, the Opposition attacked the government over the disinvestment, claiming that Pawan Hans was the region's largest Helicopter service, and it should have been a strategic choice to retain it.
Congress spokesperson Gaurav Vallabh alleged that the company (Pawan Hans), which was consistently profitable, started making losses when the disinvestment was processed. He added that this was a mere attempt to lower the valuation to benefit whoever would buy it.
The Modi government has sold 51% stake in Pawan Hans to Star9 Mobility Private Limited at Rs. 211.14 Crores. The reserve price for the sale of this 51% majority stake was fixed at Rs. 199.92 Crores.
— Indian Youth Congress (@IYC) May 1, 2022
: Shri @GouravVallabh pic.twitter.com/QEhqTn0H2s
The sale of Pawan Hans, a profitable PSU to a Pvt company that was formed just 6 months ago with an authorised capital of ₹1 lakh raises many questions & doubts!
— KTR (@KTRTRS) May 3, 2022
Pawan Hans was valued at ₹3,700 Crores in 2017! Then How come 49% of it was sold at ₹211 Cr? Any answers NPA Govt? pic.twitter.com/8WBmhMdyem
There were also allegations of assisting 'friends' of the ruling party by disinvesting the government's stake at such a low valuation, which sounded 'dodgy' as Pawan Hans owned at least 42 helicopters and was in profits till 2018. Not only this but questions were also raised on the legitimacy and credibility of Star9 Mobility and its approval to be a bidder for the disinvestment.
Pawan Hans Ltd having the fleet of at least 41 helicopter is sold out to Star9 Mobility Pvt. Ltd for ₹211.14 crore. You must know that this company was in profit till 2018. Since 2019 it startedmaking lose and sold out. Price of 20 yrs old chopper in market estimated ₹10 cr.
— Manoj Anand (@manojananda) May 2, 2022
Looks dodgy as hell. Maybe a front for someone but how was it found eligible? #pawanhans https://t.co/qoECxVc963
— Sumanth Raman (@sumanthraman) April 30, 2022
Second Disinvestment in 2022
It is the second time the government has disinvested its stake in a public sector undertaking (PSU) under the aviation portfolio in the last 12 months. The first was in October when Air India's 100 per cent stake was sold to the Tata Group for Rs 18,000 crores.
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