Pawan Hans sale: Govt to issue fresh bid document by the end of May, to indemnify buyers of contingent liability

The government has decided to make the bid document more attractive after discussions with investors on their concerns

Press Trust of India May 20, 2019 13:53:26 IST
Pawan Hans sale: Govt to issue fresh bid document by the end of May, to indemnify buyers of contingent liability
  • The government holds 51 percent stake in helicopter service provider Pawan Hans, and the remaining 49 percent is with ONGC

  • A total of 100 percent stake in Pawan Hans, which has a fleet of 46 choppers, have been put on the block

  • As per estimates of advisers to the deal, a 100 percent stake sale could fetch about Rs 100 crore to the government

New Delhi: After a botched attempt for sale of Pawan Hans, the government is likely to issue a fresh bid document by the end of this month and provide indemnity to the potential buyers against contingent liability of about Rs 500 crore in the helicopter service company.

The government has decided to make the bid document more attractive after discussions with investors on their concerns as the sale process of Pawan Hans failed to attract any suitor when the bidding ended on 6 March.

"The fresh preliminary information memorandum (PIM) would be issued by end of May. It has been decided to indemnify the investors of the contingent liability of Rs 500 crore which relates to disputed tax demand," an official source told PTI.

The government holds 51 percent stake in helicopter service provider Pawan Hans, and the remaining 49 percent is with Oil and Natural Gas Corporation (ONGC). A total of 100 percent stake in Pawan Hans, which has a fleet of 46 choppers, have been put on the block.

Pawan Hans sale Govt to issue fresh bid document by the end of May to indemnify buyers of contingent liability

File image of a Pawan Hans helicopter. Reuters

Another source said that as per estimates of advisers to the deal, a 100 percent stake sale could fetch about Rs 100 crore to the government.

In April last year, the government had issued the information memorandum for the 51 percent strategic stake sale in Pawan Hans and had sought expression of interest (EoI) from interested bidders by 18 June. Thereafter, the ONGC board in July decided to combine its 49 percent stake in the offer for sale by the Centre.

Following this, in August, the government invited fresh EoIs from entities saying that along with its 51 percent stake, the bidders will also have the option to buy ONGC's stake of 49 percent in the company. The last date for submission of EoIs was September 12. However, the total number of bidders have not made public to maintain the confidentiality of the bidding process.

In February this year, the government shared the final share purchase agreement with the shortlisted bidders of Pawan Hans and asked them to submit their financial bids by 6 March.

The government has budgeted to raise Rs 90,000 crore from disinvestment in the current financial year, up from about the Rs 84,972 crore mopped up in previous financial year.

Updated Date:

also read

ONGC weight in MSCI index to rise, shares may perk up
Investing

ONGC weight in MSCI index to rise, shares may perk up

The 5 percent disinvestment, despite being substantially lapped up by Life Insurance Corporation, has resulted in a higher free float of ONGC's shares in the market.

ONGC plant fire in Navi Mumbai: Blaze in Uran facility contained by joint firefighting ops; four dead, three injured
India

ONGC plant fire in Navi Mumbai: Blaze in Uran facility contained by joint firefighting ops; four dead, three injured

A massive fire broke out on Tuesday morning in the Oil and Natural Gas Corporation (ONGC) plant in Navi Mumbai's Uran area.

Five dead, four injured in Cochin Shipyard tanker blast; probe ordered in cause of fire at ONGC-owned vessel
India

Five dead, four injured in Cochin Shipyard tanker blast; probe ordered in cause of fire at ONGC-owned vessel

Chairman and Managing Director of Cochin Shipyard Madhu S Nair announced an immediate ex-gratia of Rs 10 lakh for the families of the deceased.