The government has approved selling its 51% stake in helicopter services provider Pawan Hans Ltd (PHL) along with a transfer of management control for INR 211.14 crore to Star9 Mobility Private Ltd, the Finance Ministry said on Friday, April 29.
PHL is a 51:49 joint venture of the government and ONGC providing helicopter and aero mobility services. ONGC had 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 the government.
“The Alternative Mechanism, empowered by the Cabinet Committee on Economic Affairs, … has approved the highest bid of M/s Star9 Mobility Private Ltd for sale of entire GoI’s shareholding (51% of shareholding) of Pawan Hans Limited (PHL) and transfer of management control,” an official statement said.
The Reserve Price for the sale of 51% shareholding of PHL was fixed at INR 199.92 crore, based on the valuation carried out by the transaction adviser and asset valuer. The government had received three bids for the Pawan Hans sale.
“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 INR 211.14 crore, which was above the Reserve Price. The other two bids were for INR 181.05 crore and INR 153.15 crore. Following due deliberations, the financial bid of M/s Star9 Mobility Private Limited has been accepted by the Government.”Ministry of Finance
Star 9 Mobility has an authorized share capital of INR 1,00,000 and a paid-up capital of INR 1,00,000. It is involved in auxiliary transport activities and activities of travel agencies, among others. Ramen Raymandal, Sumit Sawhney and Vipul Rashmikant Dave are the company directors.
Captain Sanjay Mandavia’s Big Charter Pvt Ltd, which operates regional airline flybig, owns a 26% stake in Star9 Mobility. Delhi-based charter operator Maharaja Aviation Pvt Ltd owns 25% of it, giving substantial ownership and effective control to Indian entities.
Cayman Islands-based Almas Global Opportunity Fund SPC, which is managed by UAE’s Almas Capital, has a 49% stake in the consortia that have won PHHL. The consortium is learnt to have big plans for PHHL.
The Alternative Mechanism comprises Road Transport and Highways Minister Nitin Gadkari, Finance Minister Nirmala Sitharaman, and Civil Aviation Minister Jyotiraditya Scindia.
In the fourth iteration, the government invited EoIs 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, following which three financial bids were received.
The CCEA approved the strategic disinvestment of the entire GoI stake in PHL in October 2016. The transaction had been attempted thrice in the past. In the fourth iteration with the request for Expressions of Interest (EoI) invited on December 8, 2020, seven EoIs were received and four interested bidders were shortlisted as qualified bidders. After detailed due diligence, three financial bids were received.
The helicopter firm has incurred losses in FY19, FY20 and FY21. 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 privatisation, it is expected that the strategic buyer will revitalise the company by replacing the ageing fleet through the infusion of fresh capital and improve the performance of the company, according to the government statement.