Star9 Mobility to buy govt’s 51% stake in Pawan Hans
NEW DELHI: A government panel on Friday approved the privatisation of state-run helicopter services provider Pawan Hans Ltd (PHL) accepting the highest bid of Rs 211.14 crore from a consortium — Star9 Mobility Private Ltd — which has promised to turn the losing making entity into a on demand helicopter taxi service on the lines of Uber.
This is the second major privatisation in aviation after Air India and AI Express being taken over by the Tatas earlier this year. The reserve price for the sale of 51% of PHL was fixed at Rs 199.92 crore, on the basis of a valuation carried out by experts which included a transaction adviser and asset valuer).
The three bids were opened in the presence of the bidders and all were found to be valid. Star9 Mobility private ltd, a consortium of Big Charter Private Limited, Maharaja Aviation Private Limited 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 major relief for the government which made several unsuccessful attempts in the past to privatise the helicopter service. This is the second major privatisation in the aviation sector after the landmark sale of Air India to the Tata group. The aviation companies next to be sold by the government include Alliance Air and subsidiaries of erstwhile state-owned AI like AI Engineering.
A pilot-turned-airline owner, Captain Sanjay Mandavia, who had unsuccessfully bid for Jet Airways, is part of the winning consortia that will take over PHHL and aims to offer choppers on demand. Rohini Heliport in Delhi will remain the base from where the privatised PHHL will operate flights to and from the capital. Captain Mandavia’s Big Charter Pvt Ltd, which operates regional airline flybig, owns 26% stake in Star9 Mobility.
Delhi-based charter operator Maharaja Aviation Pvt Ltd owns 25% in it, giving substantial ownership and effective control to Indian entities. Cayman Islands-based Almas Global Opportunity Fund SPC, that is managed by UAE’s Almas Capital, has 49% stake in the consortia that has won PHHL.
The consortium is learnt to have big plans for PHHL. Aviation veteran Mandavia’s Indore-based regional airline flybig currently has three ATRs and a Bombardier Q400. The Q400 has been wet leased (taken on rent along with operating crew) from Ethiopian Airlines to start a twice-weekly direct between Delhi and Shillong from Monday (May 2). Flybig has ordered 10 Twin Otters for flights between tier 3 and 4 cities and it plans to get seven more ATRs by March 2023 to have 10 ATRs in its fleet.
Captain Mandavia is a founding member of the leading Flight Simulator Technique Centre (FSTC) which currently has 9 simulators. Maharaja Aviation is a non-scheduled operator with a fleet of two Robinson Helicopters. The alternative mechanism or the group of ministers , empowered by the Cabinet Committee on Economic Affairs (CCEA), comprising Nitin Gadkari, Union Minister for road transport and highways, Nirmala Sitharaman, Union Minister for finance & corporate affairs and Jyotiraditya Scindia, Union Minister of civil aviation, approved the highest bid of Star9 Mobility Private Ltd for sale of the entire shareholding (51% ) of Pawan Hans Limited (PHL) and transfer of management control, according to a government statement.
PHL is a joint venture of the government of India and ONGC providing helicopter and aero mobility services. The Centre holds 51% of the shares in the company and ONGC holds the balance 49%. ONGC had earlier decided to offer its entire shareholding to the successful bidder identified in the strategic disinvestment transaction, on the same price and terms as decided by the Centre.
The CCEA had approved the strategic disinvestment in October, 2016 and the transaction had been attempted thrice in the past. The government aims to raise Rs 65,000 crore from stake sales in state run firms and has so far raised Rs Rs 3059 crore. The transaction was implemented through an open, competitive bidding process supported by a multi-layered consultative decision making mechanism involving inter ministerial group, core group of secretaries on disinvestment and the empowered panel of ministers.
The transaction now moves to the concluding stage and includes issuing of the letter of award, signing of the share purchase agreement and closing of the transaction. PHL has been incurring losses in the last three years and the company has a fleet of 42 helicopters with 41 of them owned by the company.
The owned helicopters have an average age of over 20 years and three-fourths of them are presently not being manufactured by the original equipment manufacturer. With this privatisation, it is expected that the strategic buyer will revitalise the company by replacing the ageing fleet through infusion of fresh capital and improve the performance of the company, according to the government statement.