Divestment from Pawan Hans: the sale of the public helicopter service provider will soon be finalized
The government may soon finalize the winning bid for state-owned helicopter service provider Pawan Hans from a group of bidders including JSW Steel, run by Sajjan Jindal, and Jindal Steel & Power, owned by his brother Navin Jindal, it said. official sources. “First of all, the reserve price needs to be set before the opening of financial bids,” an official told FE, adding that the deal could happen within days.
After the independent setting of the reserve price, the sealed financial offers already received will be opened in the presence of the bidders. The Center could raise around Rs 500 crore from the sale of its 51% stake in the helicopter company.
In December 2021, the Department of Investment and Public Assets Management had received financial offers for the divestment of struggling helicopter operator Pawan Hans, which could make it the second central PES to be privatized in 2022 after Air India.
On December 8, 2020, the Center had invited a new expression of interest (EoI) for its stake in the company, by allowing a potential buyer to strip the asset and change the shareholding after a year of acquisition of controlling interest in the helicopter business. In line with previous EOI conditions, asset stripping was permitted after two years, while change of ownership was permitted after three years. Under new terms, even the buyer can now undertake the sale and leaseback of helicopters within a year of divestment, provided the money raised is used for business operations.
The ONGC, which holds a 49% stake in Pawan Hans, will also sell its entire stake to the successful bidder on the same terms as the government. In recent years, contracts with ONGC and state governments have provided a stable source of revenue for the company; on average, 40-45% of its revenue comes from the oil and gas sector and about 35-40% from state governments.