Govt puts brakes on Pawan Hans privatisation after red flags raised over the deal

Star9 Mobility – a consortium of Maharaja Aviation, Big Charter and Almas Global Opportunity Fund – bagged the bid to buy the government’s 51 percent stake in public sector helicopter service provider Pawan Hans for Rs 211 crore just at the end of last month.

But within weeks, the Narendra Modi government decided to put on hold the decision to divest its stake in the loss-making helicopter service provider. Maharaja Aviation owns 25 percent in Start9 Mobility, Big Charter owns 26 percent and Almas Global Opportunity Fund owns the majority stake.

The decision, though starting, came even after the consortium won the bid days after the Kolkata bench of the National Company Law Tribunal (NCLT) raised a red flag on the Cayman Island-based Almas Global on April 22. Almas Global, NCLT said, had failed to pay around Rs 568 crore to creditors of Kolkata-based EMC Ltd under an approved resolution plan.

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"The government will do a legal examination of the NCLT order before proceeding further in Pawan Hans divestment matter," sources told CNBC-TV18 on Monday.

Other political parties had also alleged that the winning bidder, Star9 Mobility, was only created in October 2021 and the company has not filed a single annual return, and its paid-up capital was Rs 1 lakh.

Some reports also said Star9 Mobility doesn't have any helicopters of its own, while Big Charter had just three. Further, Almas Global was alleged to have no experience in this sector.

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Refuting allegations of Star9 Mobility not meeting eligibility criteria, the Department of Investment and Public Asset Management (DIPAM) had said on May 6 that the net worth of the consortium was Rs 691 crore against the requirement of Rs 300 crore mandated by the government.

The government had received three bids for the Pawan Hans sale. Star9 Mobility had emerged as the highest bidder, quoting Rs 211.14 crore, which was above the reserve price.

The reserve price for the sale of 51 percent shareholding of Pawan Hans was fixed at Rs 199.92 crore based on the valuation carried out by the transaction adviser and asset valuer. The other two bids were for Rs 181.05 crore and Rs 153.15 crore.

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ONGC, which holds the remaining 49 percent in Pawan Hans, had earlier said it would offer its shareholding to the successful bidder on the price and terms decided by the government.

This is the second divestment that has been put on hold this year after. Central Electronics (CEL) was put on hold after the employees’ union approached the court against the sale of the company to a little-known firm.