After previous unsuccessful attempts to sell the country’s biggest public sector helicopter operator, Pawan Hans Ltd (PHL), the government on Thursday invited fresh bids for offloading its stake in the company.
The government holds 51% stake in PHL and the rest is held by Oil and Natural Gas Corporation (ONGC), Mumbai, in what now ranks as South Asia’s largest helicopter company.
However, in a huge embarrassment after the government announced its intention to sell PHL, the company’s performance has nosedived sharply and the 33-year-old firm will record its first-ever loss at over ₹75 crore during fiscal 2018-2019.
A senior aviation official said that such multiple attempts to sell the company has actually proved detrimental to its image.
“The government has already merged certain public sector entities with excellent results. It must consider the option of merging PHL with the Hindustan Aeronautics Ltd (HAL), which will be mutually beneficial to both. Such a measure could create a truly world-class and profitable company,” the official, requesting anonymity, told IANS.
Industry players express doubts over the expectations of earning around ₹1,000 crore from the sale, pointing to PHL’s loss and the ongoing huge turbulence in the country’s aviation sector that has not spared even Air India.
In April 2018, the government had first announced the proposed strategic sale in PHL and sought Expression of Interest (EoI) from prospective bidders.
In August 2018, the ONGC board decided to unconditionally offer its entire stake of 273,166 shares (49%) in PHL at the same price and similar terms and conditions as decided by the government for sale of its 51% shareholding.
Accordingly, a total of combined 100% stake in the PHL is now available to the bidders. The last date for submitting bids is 22 August.
However, in case state-run ONGC is unable to sell its 49% stake for any reason, the government’s stake sale would remain unaffected and the successful bidder would have to execute a shareholders’ agreement with ONGC.
Launched in October 1985 as the Helicopter Corporation of India (HCI), PHL is a ‘Mini-Ratna 1’ category company with around 42 helicopters providing varied services.
These include offshore operations, mainly to ONGC at the Bombay High oilfields, inter-island transportation, remote or inaccessible areas, rescue works, corporate and VVIP charters, tourism and other special services.
It had charted out a massive expansion plan to become a 100-helicopter company by 2027, diversify into seaplanes, small fixed-wing aircraft, take up foreign projects and create infrastructure like helipads and heliports.
In January 2017, the government approved the privatisation of PHL after which it was put up for sale for the first time last year, and a renewed attempt is now being made after the matter went into cold storage because of the 2019 Lok Sabha elections.
Significantly, until last year, PHL maintained a profitable balance sheet and has so far paid over ₹270 crore as dividends to the government, before slipping into the red this year.