Pawan Hans privatisation: Govt gets financial bids in fourth attempt

The finance ministry on Friday said it received financial bids for disinvestment of ailing helicopter operator Pawan Hans, which could make it the second public sector undertaking to be privatised in FY22 after Air India.

“The financial bids for Pawan Hans disinvestment have been received by the transaction advisor. The process now moves to a concluding stage,” DIPAM Secretary Tuhin Kanta Pandey tweeted.

Last year, the ministry had in a fresh preliminary information memorandum sweetened the terms to sell the helicopter operator in its fourth attempt, reducing the minimum networth for potential bidders and the lock-in period of investment and allowing the successful bidder to sell assets after a year. The successful bidder was now allowed to sell assets one year after acquisition, instead of two years proposed in the expression of interest issued in 2019.

While the change in shareholding among consortium partners was not permitted, the new offer document allowed it if the lead investor holds a minimum of 26 per cent stake and other members hold at least 10 per cent each. The lock-in period for investment was also reduced to one year from three years earlier.

However, a new clause of business continuity was added to ensure that the successful bidder will not liquidate or close down the business for three years. The minimum networth of bidders has also been reduced to Rs 300 crore from Rs 350 crore earlier and the profitability criteria has been abolished to increase the universe of the bidders.

Till July 2020, the company had 686 employees — 363 regular and 323 contractual. Both the Centre (51 per cent) and ONGC (49 per cent) have decided to disinvest their entire equity shareholdings in Pawan Hans in a strategic disinvestment with transfer of management control.

The company’s ­ capital as of March 31, 2020, was Rs 560 crore. The PSU’s revenue has been falling since FY16 and it recorded losses in FY19 and FY20.  In FY20, its total revenues stood at Rs 376.8 crore and Ebitda (earnings before interest, taxes, depreciation, and amortisation) loss of Rs 8.1 crore.

The government is most likely to miss the ambitious disinvestment target of Rs 1.75 trillion for FY22 despite LIC’s initial public offering scheduled for March quarter. So far, the government has garnered Rs 9,330 crore from minority stake sales.

In October, the government sold Air India to Tata Group at an enterprise value of Rs 18,000 crore, the first major privatisation step in about two decades. The government will get Rs 2,700 crore cash from Tatas for sale of its 100 per cent stake.