Sale of Pawan Hans: Government to issue new offer document, to indemnify buyers from possible liability
After a failed attempt to sell Pawan Hans, the government will likely issue a new offer document by the end of the month and indemnify potential buyers against possible liability of around Rs 500 crore in the helicopter services company .
The government decided to make the offer document more attractive after discussions with investors over their concerns, as Pawan Hans’ sale process failed to attract any suitors when the auction ended on March 6.
“The new preliminary information memorandum (PIM) would be published by the end of May. It has been decided to indemnify investors for the contingent liability of Rs 500 crore which relates to a contested tax claim, ”an official source told PTI.
The government owns a 51 percent stake in helicopter service provider Pawan Hans, and the remaining 49 percent is owned by the Oil and Natural Gas Corporation (ONGC). A total of 100 percent of the capital of Pawan Hans, which owns a fleet of 46 helicopters, has been put on the block.
Another source said that, according to the deal’s advisers, a sale of 100% of the shares could earn the government around Rs 1,000 crore.
In April last year, the government issued the information memorandum for the sale of 51 percent of the strategic stake in Pawan Hans and solicited expressions of interest (EoI) from interested bidders by June 18. . Subsequently, the CGSB board decided in July to combine its 49% stake in the Centre’s sale offer.
Following this, in August, the government invited new entity EoIs saying that in addition to its 51% stake, bidders will also have the option to purchase CGSB’s 49% stake in the company. . The deadline for submitting EoIs was September 12th. However, the total number of bidders has not been made public in order to maintain the confidentiality of the tendering process.
In February this year, the government shared the final share purchase agreement with Pawan Hans’ shortlisted bidders and asked them to submit their financial bids by March 6.
The government plans to raise Rs 90,000 crore from the divestment in the current fiscal year, compared to approximately Rs 84,972 crore mopped up in previous years.