Star9 Mobility to buy Pawan Hans for Rs 211 crore

Star9 Mobility, a consortium of Big Charter Private Limited, Maharaja Aviation Private Limited and Almas Global Opportunity Fund SPC has won the bid to acquire 51% stake in state-run helicopter firm Pawan Hans for Rs 211.14 crore, 5.6% higher than the reserve price set for the deal.

Star9 Mobility outbid two other bidders, who quoted Rs 181.05 crore and Rs 153.15 crore for the government’s stake. After Air India privatisation in January, this will be the second instance of privatisation of a state-run firm in 2022.

“The transaction now moves to the concluding stage. The next steps are issuing of the Letter of Award, signing of the Share Purchase Agreement and closing of the transaction,” the finance ministry said in a statement.

“The alternative mechanism, empowered by the Cabinet Committee on Economic Affairs, comprising road minister Nitin Gadkari, finance minister Nirmala Sitharaman and aviation minister Jyotiraditya M Scindia has approved the highest bid of Star9 Mobility for sale of entire government shareholding of 51% of Pawan Hans and transfer of management control, the ministry said.

State-run oil explorer ONGC holds the balance 49% in the helicopter firm. ONGC had earlier decided to offer its entire shareholding to the successful bidder identified in the government strategic disinvestment transaction, on the same price and terms.

The CCEA had approved the strategic disinvestment of entire GoI stake in PHL in October, 2016. The transaction had been attempted thrice in the past. In the fourth iteration with 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.

As per extant procedure, the reserve price for sale of 51% shareholding of PHL was fixed at Rs 199.92 crore, on the basis of valuation carried out by experts (transaction adviser and asset valuer).

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. “With this privatisation, it is expected that the strategic buyer will revitalise the company by replacing the ageing fleet through infusion of fresh capital and improve the performance of the company,” the ministry added.