Criticism of sale of Pawan Hans due to distorted facts: Ministry of Finance


The center is expected to issue an award letter to the winning consortium as early as next week

The center is expected to issue an award letter to the winning consortium as early as next week

Suggestions that due process would not be followed for the planned sale of the government’s 51% stake in loss-making airline operator Pawan Hans Limited are misinformed and misplaced, senior Treasury officials claimed on Friday. They said the center will probably issue the award letter to the winning consortium as soon as next week.

Last Friday, a ministerial body empowered by the Cabinet Committee on Economic Affairs to decide details of the divestment transaction approved the sale of shares and the transfer of management control to Pawan Hans to Star9 Mobility Private Limited, a special purpose vehicle formed by a consortium of bidders.

“One of the skewed arguments we’ve heard is that the successful company has a net worth of 1 lakh instead of the 300 crore net worth we set and was only incorporated in October 2021, making it impossible to have an audited one as required submitted annual financial statements. This is, at best, a misreading of the facts,” said a senior official with the Department of Investments and Public Asset Management (DIPAM).

Even to be able to bid for the proposed divestment, participants had to prove the net worth of ₹300 crore, which the winning consortium partners had provided. Star9 Mobility was formed last October as the three partners – Big Charter Private Limited, Maharaja Aviation Private Limited and Almas Global Opportunity Fund SPC – could not bid without a corporate body representing them.

Combined Net Worth

“After the Preliminary Information Memorandum was issued, the three partners of the winning consortium had provided evidence of a combined net worth of ₹699.49 crore. This was updated again to £710.08m at the time we called for bids,” the official explained. “In both phases, all three submitted their updated financial statements for the last 12 months,” he added.

The sale process, which will bring the Center £211.14m for its stake, will proceed with the Center issuing an acceptance letter next week, after which the buyer will need to obtain regulatory approvals and transfer the funds.

ONGC, which holds a 49% interest in the company, will also offer its interest to Star9 Mobility upon the award of the acceptance and the buyer has one week to express an interest in purchasing these shares as well.

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