Criticism of Pawan Hans sale based on distorted facts: Finance Ministry

Insinuations about the due process not being followed for the proposed sale of the government’s 51% stake in loss-making air transport operator Pawan Hans Limited are misinformed and misplaced, senior Finance Ministry officials asserted on Friday. They said the Centre would likely issue the letter of award to the winning consortium as early as next week.

Last Friday, a ministerial panel empowered by the Cabinet Committee on Economic Affairs to decide on disinvestment transaction details had approved the stake sale and transfer of management control in Pawan Hans to Star9 Mobility Private Limited, a special purpose vehicle set up by a consortium of bidders.

“One of the distorted arguments we have heard is that the successful entity has a net worth of ₹1 lakh instead of the ₹300-crore net worth we had stipulated, and was set up only in October 2021 so there was no way they could have submitted one year’s audited financial statements as required. This is a misinterpretation of facts at best,” a senior official in the Department of Investment and Public Asset Management (DIPAM) said.   

Even to be eligible to bid for the proposed disinvestment, those in the race had to demonstrate the ₹300-crore net worth, which the partners of the winning consortium had done. Star9 Mobility was incorporated last October as the three partners — Big Charter Private Limited, Maharaja Aviation Private Limited and Almas Global Opportunity Fund SPC — could not bid without an entity representing them.

Combined net worth

“After the preliminary information memorandum was issued, the three partners of the winning consortium had submitted proof of a combined net worth of ₹699.49 crore. This was updated again at the time we called for bids to ₹710.08 crore,” the official explained. “At both stages, all three submitted their updated financial statements for the past 12 months,” he added.   

The sale process, which will fetch the Centre ₹211.14 crore for its stake, will move forward with the Centre issuing a letter of award next week, following which the buyer will have to secure regulatory clearances and remit the funds.

ONGC, which has a 49% stake in the company, will also offer its stake to Star9 Mobility after the letter of award is issued, and the buyer will have a week to convey its interest in purchasing those shares as well.