Govt calls off Pawan Hans disinvestment for the third time as successful bidder found unfit

Majority owner in consortium that won stake sale for state-owned helicopter operator faces legal trouble

Majority owner in consortium that won stake sale for state-owned helicopter operator faces legal trouble
Majority owner in consortium that won stake sale for state-owned helicopter operator faces legal trouble

Govt disqualifies highest bidder, annuls EOI process for sale of Pawan Hans

The Government of India on Monday decided to call off the strategic disinvestment of Pawan Hans due to the disqualification of the successful bidder, making it the third unsuccessful attempt to privatize the helicopter service provider. The government owns a 51 percent stake in Pawan Hans, while public sector oil major ONGC holds 49 percent. In December 2020, the Government invited EoI (expression of interest) for selling Pawan Hans along with ONGC’s stake.

In April 2022, it approved the highest bidder, Star9 Mobility Private Ltd, a consortium of Maharaja Aviation Pvt Ltd, Big Charter Pvt Ltd, and Almas Global Opportunity Fund, as the successful bidder for the sale of 100 percent equity shareholding in Pawan Hans. However, in May the sale process was put on hold after it came to light that the lead member of the winning bidder consortium — Almas Global Opportunity Fund (AGOF) SPC — has a case pending against it at the National Company Law Tribunal (NCLT).

In a statement, the Department of Investment and Public Asset Management (DIPAM) on Monday said the government has examined the adverse orders of NCLT and NCLAT. “After careful consideration of the response of the successful bidder to the show cause notice, with the approval of Alternative Mechanism …The government has decided that successful bidding consortium M/s Star 9 Mobility Pvt Ltd is disqualified from the process of strategic disinvestment of Pawan Hans Ltd… Further, the current EoI process for strategic disinvestment stands annulled,” the DIPAM said.

Alternative Mechanism comprises Ministers of Road Transport & Highways, Finance and Civil Aviation.

After the consortium bidder was selected in April, it came to light that one of its members had received an adverse order from the Kolkata bench of NCLT. AGOF also did not receive a favourable ruling from the National Company Law Appellate Tribunal (NCLAT). Later, the Insolvency and Bankruptcy Board of India (IBBI) also filed a complaint against the concerned consortium member in the special court.

The DIPAM under the Finance Ministry statement further said that the government examined the adverse orders of NCLT and NCLAT and took note of the complaint filed by IBBI and considered that the adverse orders against a consortium member would lead to disqualification of the successful bidder.

After that a show-cause notice was issued to the bidder and the response did not find favour with the panel of ministers or the alternative mechanism. This was the third attempt to privatize Pawan Hans, which did not succeed.

In 2018, the Modi government first invited bids to sell a 51 percent stake in Pawan Hans. That bid was withdrawn after ONGC decided to sell its 49 percent stake in the company along with the government.

In 2019, a second attempt was made to sell Pawan Hans, but the sale process failed to receive an investor response. Finally, in December 2020, the third attempt was made and EoIs were invited. A year later, financial bids were received for buying out the helicopter service provider.

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