Home Taxi company Star9 Mobility buys 51% government stake in Pawan Hans for Rs 211.14...

Star9 Mobility buys 51% government stake in Pawan Hans for Rs 211.14 crore

Captain Mandavia’s Big Charter Pvt Ltd, which operates regional airline flybig, has a 26% stake in Star9 Mobility.

NEW DELHI: A government panel on Friday approved the privatization of state-owned helicopter service 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 become the losing entity. in an on-demand helicopter taxi service on Uber lines.
This is the second major privatization in the aviation sector after the Tatas took over Air India and AI Express earlier this year.
The reserve price for the sale of 51% of PHL was set at Rs 199.92 crore, based on a valuation carried out by experts which included a transaction advisor and an asset appraiser).
The three bids were opened in the presence of the bidders and all were deemed valid.
Star9 Mobility private ltd, a consortium of Big Charter Private Limited, Maharaja Aviation Private Limited and Almas Global Opportunity Fund SPC, became the highest bidder. The other two offers were Rs 181.05 crore and Rs 153.15 crore.
The sale is a major relief for the government which has made several unsuccessful attempts in the past to privatize the helicopter service. This is the second major privatization in the aviation sector after the historic sale of Air India to the Tata group.
Aviation companies that will later be sold by the government include Alliance Air and formerly state-owned AI subsidiaries, such as AI Engineering.
A pilot-turned-airline owner, Captain Sanjay Mandavia, who had bid unsuccessfully for Jet Airways, is among the winning consortia to take over PHHL and aim to offer helicopters on demand.
Rohini Heliport in Delhi will remain the base from which the privatized PHHL will operate flights to and from the capital.
Captain Mandavia’s Big Charter Pvt Ltd, which operates regional airline flybig, has a 26% stake in Star9 Mobility. Maharaja Aviation Pvt Ltd, a Delhi-based charter operator, owns 25%, giving substantial ownership and effective control to Indian entities.
Almas Global Opportunity Fund SPC, based in the Cayman Islands and managed by Almas Capital of the United Arab Emirates, holds a 49% stake in the consortia that won PHHL. The consortium learned to have big plans for PHHL.
Indore-based Mandavia-based flybig regional airline currently has three ATRs and one Bombardier Q400.
The Q400 has been wet leased (taken on charter with operating crew) from Ethiopian Airlines to start a bi-weekly direct flight between Delhi and Shillong from Monday 2 May.
Flybig has ordered 10 Twin Otters for flights between Tier 3 and Tier 4 cities and plans to secure another seven ATRs by March 2023 to have 10 ATRs in its fleet.
Captain Mandavia is a founding member of the main Flight Simulator Technical 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), comprising Nitin Gadkari, Union Minister for Road Transport and Highways, Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs and Jyotiraditya Scindia, Minister of Civil Aviation, has approved Star9 Mobility Private Ltd’s highest bid for the sale of the entire shareholding (51%) of Pawan Hans Limited (PHL ) and the transfer of management control, according to a government statement.
PHL is a joint venture between the Government of India and the ONGC which provides helicopter and air mobility services. The Center owns 51% of the shares of the company and ONGC owns the remaining 49%.
ONGC had previously decided to offer its entire stake to the successful bidder identified in the strategic divestment operation, at the same price and under the same conditions as those decided by the Centre.
The CCEA had approved the strategic divestment in October 2016 and the transaction had been attempted three times in the past.
The government aims to raise Rs 65,000 crore through the sale of stakes in state-owned enterprises and has so far raised Rs 3,059 crore.
The transaction was implemented through an open and competitive bidding process supported by a multi-level consultative decision-making mechanism involving an interdepartmental group, a core group of secretaries on divestment and the empowered group of ministers.
The transaction is now moving to the closing stage and includes the issuance of the letter of award, the signing of the share purchase agreement and the closing of the transaction.
PHL has suffered losses over the past three years and the company has a fleet of 42 helicopters, 41 of which are company owned.
Owned helicopters have an average age of over 20 years and three-quarters of them are currently not manufactured by the original equipment manufacturer.
With this privatization, the strategic buyer is expected to revitalize the company by replacing the aging fleet with the injection of new capital and improve the performance of the company, according to the government statement.