Centre ‘overlooked’ aviation ministry’s view on divesting Pawan Hans stake
NEW DELHI: The Narenda Modi government decided to sell its entire share in Pawan Hans Ltd despite the aviation ministry's view that the timing would not be right for a stake sale in the state-owned helicopter operator, three senior aviation ministry officials told ET.
This is a rare occasion when the central government has overlooked the view of the nodal ministry on divesting stake in a public sector undertaking, people familiar with the matter said. The Government of India, through civil aviation ministry, owns 51 per cent stake in the company, while the rest is owned by state-run Oil and Natural Gas Corporation. Set up in 1986, Pawan Hans is the largest helicopter operator in the country with a fleet of 42 choppers.
"In our view conveyed to NITI Aayog, we had said that the helicopter operator should be given some time before the government goes ahead with divestment, as it is working on expanding in the regional space through fixed-wing aircraft operations and seaplanes," said one of the officials, who did not wish to be identified. Another official questioned the timing of the move. "Perhaps the timing of disinvestment could have been better," he said.
The government has, however, decided to divest stake in the company by the end of 2017. It had earlier planned to list the company on the bourses to meet its target of Rs 20,500 crore through strategic stake sale in the current fiscal.
To facilitate the divestment, the finance ministry waived about Rs 500 crore outstanding against the company. This includes Rs 130 crore provided by the government to the company, which will be converted into equity, and the balance Rs 360 crore is the interest on this amount, which was frozen in 2004, and would be waived.
Analysts said the government should try to sell the company to strategic investors since competitors would not like to buy a stake in it. "It will be difficult for the government to find a buyer for Pawan Hans in any global helicopter company because these companies would like to avoid India due to its archaic rules," said Mark Martin, CEO at Martin Consulting.
This is a rare occasion when the central government has overlooked the view of the nodal ministry on divesting stake in a public sector undertaking, people familiar with the matter said. The Government of India, through civil aviation ministry, owns 51 per cent stake in the company, while the rest is owned by state-run Oil and Natural Gas Corporation. Set up in 1986, Pawan Hans is the largest helicopter operator in the country with a fleet of 42 choppers.
"In our view conveyed to NITI Aayog, we had said that the helicopter operator should be given some time before the government goes ahead with divestment, as it is working on expanding in the regional space through fixed-wing aircraft operations and seaplanes," said one of the officials, who did not wish to be identified. Another official questioned the timing of the move. "Perhaps the timing of disinvestment could have been better," he said.
The government has, however, decided to divest stake in the company by the end of 2017. It had earlier planned to list the company on the bourses to meet its target of Rs 20,500 crore through strategic stake sale in the current fiscal.
To facilitate the divestment, the finance ministry waived about Rs 500 crore outstanding against the company. This includes Rs 130 crore provided by the government to the company, which will be converted into equity, and the balance Rs 360 crore is the interest on this amount, which was frozen in 2004, and would be waived.
Analysts said the government should try to sell the company to strategic investors since competitors would not like to buy a stake in it. "It will be difficult for the government to find a buyer for Pawan Hans in any global helicopter company because these companies would like to avoid India due to its archaic rules," said Mark Martin, CEO at Martin Consulting.
