New Delhi: A government panel on Friday approved the privatization of state-run helicopter service provider Pawan Hans Ltd (PHL) by accepting the highest bid of Rs 211.14 crore from a consortium – Star 9 Mobility Pvt Ltd – which won Rs. Has promised to turn over the losing unit. An on-demand helicopter taxi service on the lines of Uber.
This is the second major privatization in the aviation sector after Tata’s acquisition of Air India and AI Express earlier this year.
The reserve price for the sale of 51% of PHL was fixed at Rs 199.92 crore based on the valuation done by experts, which included a transaction advisor and asset valuer).
All the three bids were opened in the presence of the bidders and all were found valid.
A consortium of Star9 Mobility Pvt Ltd, Big Charter Pvt Ltd, Maharaja Aviation Pvt Ltd and Almas Global Opportunity Fund SPC, emerged as the highest bidder. The other two bids were for Rs 181.05 crore and Rs 153.15 crore.
The sale comes as a big relief to the government, which had made several unsuccessful attempts to privatize the helicopter service in the past. This is the second major privatization in the aviation sector after the historic sale of Air India to the Tata group.
Airlines sold by the government include subsidiaries of erstwhile state-owned AI such as Alliance Air and AI Engineering.
A pilot-turned-airline owner, Captain Sanjay Mandaviya, who bid unsuccessfully for Jet Airways, is part of the winning consortium that will acquire PHHL and aims to offer choppers on demand.
Rohini Heliport in Delhi will be the base from where the privatized PHHL will operate flights to and from the Rajdhani.
Captain Mandaviya’s Big Charter Private Limited, which operates the regional airline FlyBig, holds a 26% stake in Star9 Mobility. Delhi-based charter operator Maharaja Aviation Private Limited owns 25% of it, giving substantial ownership and effective control to Indian entities.
The Cayman Islands-based Almas Global Opportunity Fund SPC, which is managed by Almas Capital of the UAE, holds a 49% stake in the PHHL winning consortia. The consortium is understood to have big plans for PHHL.
Aviation giant Mandaviya’s Indore-based regional airline FlyBig currently has three ATRs and a Bombardier Q400.
Q400 has been wet leased (hired with operating crew) from Ethiopian Airlines for a twice weekly direct start between Delhi and Shillong from Monday (May 2).
Flybig has ordered 10 Twin Otters for flights between Tier 3 and 4 cities and plans to acquire seven more ATRs to have 10 ATRs in its fleet by March 2023.
Captain Mandaviya is a founding member of the premier Flight Simulator Technology Center (FSTC), which currently has 9 simulators. Maharaja Aviation is a non-scheduled operator with a fleet of two Robinson helicopters.
The Alternative Mechanism or Group of Ministers, empowered by the Cabinet Committee on Economic Affairs (CCEA), includes Nitin Gadkari, Union Minister for Road Transport and Highways, Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs and Jyotiraditya Scindia, Union Minister. According to a government statement, Civil Aviation has approved the highest bid of Star9 Mobility Pvt Ltd for sale of entire shareholding (51%) of Pawan Hans Limited (PHL) and transfer of management control.
PHL is a joint venture of Government of India and ONGC which provides helicopter and aero mobility services. Kendra holds 51% shares in the company and ONGC holds the remaining 49% shares.
ONGC had earlier decided to give its full stake to the successful bidder identified in the strategic disinvestment transaction at a price and terms decided by the Centre.
The CCEA had approved the strategic disinvestment in October 2016 and before that the transaction was attempted thrice.
The government aims to raise Rs 65,000 crore through stake sale in state-owned companies and has so far raised Rs 3059 crore.
The transaction was implemented through an open, competitive bidding process, supported by a multi-layered consultative decision-making system comprising the Inter-Ministerial Group, the Main Group of Secretaries on Disinvestment and the Empowered Panel of Ministers. it was done.
The transaction has now moved into the closing phase and involves issuance of award letter, signing of share purchase agreement and closing the transaction.
PHL is incurring losses in the last three years and the company has a fleet of 42 helicopters, of which 41 are owned by the company.
The average lifespan of owned helicopters is over 20 years and three-quarters of them are not currently being manufactured by the original equipment manufacturer.
According to the government statement, with this privatization, it is expected that the strategic buyer will revive the company by replacing the old fleet through fresh capital and improve the performance of the company.