Star9 Mobility to buy 51% govt stake in Pawan Hans for Rs 211.14 cr

After three failed attempts to disinvest, the Centre has finally found a suitor for loss-making Pawan Hans. The government will sell its 51 per cent stake in Pawan Hans to Star9 Mobility Pvt Ltd for Rs 211 crore.

The alternative mechanism, comprising Finance Minister Nirmala Sitharaman, Road Transport and Highways Minister Nitin Gadkari and Civil Aviation Minister Jyotiraditya Scindia, approved the highest bid placed by Star9. The Centre will also transfer management control to Star9.

This is the second successful privatisation in the civil aviation space after the Air India sale. This is also the third instance of privatization post Nilachal Ispat Nigam after the Centre announced the new Public Sector Enterprises (PSE) policy in February 2021.

Star9 Mobility is a consortium of Big Charter Pvt Ltd, Maharaja Aviation Pvt Ltd and Almas Global Opportunity Fund SPC. Star9 Mobility was incorporated on October 29, 2021, and registered at Registrar of Companies, Mumbai.

The company has an authorized share capital of Rs 1,00,000 and paid up capital of Rs 1,00,000. It is involved in auxiliary transport activities and activities of travel agencies, among others. Ramen Raymandal, Sumit Sawhney and Vipul Rashmikant Dave are the company directors.

The reserve price for sale of Centre’s 51 per cent shareholding in the helicopter service provider was fixed at Rs 199.9 crore based on valuation carried out by transaction adviser and asset valuer. 

SBI Capital Markets was the transaction adviser for the sale. The Centre had received seven expressions of interest (EoIs) for acquiring Pawan Hans, following which four were shortlisted as qualified bidders.

The Centre had received three financial bids, the other two for Rs 181 crore and Rs 153 crore. The government did not share the names of the other two bidders. Privatisation of Pawan Hans is expected to revitalize the company by replacing the aging fleet through infusion of fresh capital and improve its performance, the Ministry of Finance said in a statement.

Pawan Hans has been incurring losses in the last three years. It has a fleet of 42 helicopters, of which 41 are owned by it. The owned helicopters have an average age of 20 years, and the original equipment manufacturer has stopped manufacturing three-fourths of them.

Deal takes off

• Star9 is a consortium of Big Charter, Maharaja Aviation, and Almas Global Opportunity Fund SPC
• Reserve price for sale of Centre’s 51% shareholding in Pawan Hans was set at Rs 199.9 crore
• 7 EoIs received; 4 shortlisted as qualified bidders; 3 placed financial bids
• Centre to issue letter of award to Star9, sign the share purchase agreement