Monday, October 3, 2022

Govt is trying to sweeten the Pawan Hans deal for potential buyers. Know how

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PW Bureau

The government decided to introduce changes in the bid document after discussions with investors on their concerns

New Delhi: Taking lessons from its previous botched attempt to sell Pawan Hans, the government is now likely to issue a fresh bid document by the end of May that will provide buyers indemnity against contingent liability of about Rs 500 crore in the helicopter service company.

“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 said.

Changes made after consultation with investors

The government decided to introduce changes in the bid document after discussions with investors on their concerns. The last attempt made by the government to sell Pawan Hans had failed, with no bidder turning up by the time bidding ended on March 6.

Sources said that according to estimates by advisers to the deal, a 100 percent stake sale could fetch about Rs 100 crore to the government.

The backdrop

The government holds 51 percent stake in Pawan Hans and the remaining 49 percent is owned by Oil and Natural Gas Corporation (ONGC). The government has plans to put up the entire 100 percent stake in Pawan Hans up for sale. The helicopter service provider has a fleet of 46 choppers.

In April 2018, the government had issued the information memorandum for 51 percent stake sale in Pawan Hans and had sought expression of interest (EoI) from buyers by June 18. Thereafter, ONGC had decided to combine its 49 percent stake in July in the offer made by the Centre.

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