Following this, in August 2018, the government invited fresh EoIs.
With its previous offers to sell Pawan Hans finding no takers, the Centre is looking to reduce the liabilities of the helicopter firm before inviting fresh expression of interest (EoI) soon.
“The government is likely to take some decisions to reduce liabilities and risks associated with the company,” an official told FE. The Centre owns Pawan Hans in a 51:49 ratio with the state-run oil explorer ONGC.
As on March 31, 2018, Pawan Hans had `253-crore non-current liabilities, including a `202-crore deferred income tax liabilities and loans of `19 crore. It had another `210-crore current liabilities, including trade payables of `110 crore in FY18.
The company deployed 738 employees, whose annual wage and other benefits cost `174 crore in FY18 or 44% of its total revenue of `395 crore (lower than `428 crore in FY17) in the year.
The firm, which clocked a `20-crore net profit in FY18, is reported to have incurred a loss of about `89 crore in FY19. Already, the company has intimated its staff that the April salary payment would be delayed due to financial woes. “It has to be sold otherwise budgetary support will be needed to run it,“ another official said.
With the finances of the helicopter service provider worsening due to an ageing fleet, the interested bidders did not put their financial bids by March 6, the last date for the submission of proposals, in the third such exercise. The bidders are now looking for a lower valuation of the firm.
The Centre had invited EoIs twice for its 51% stake in PHL — in October 2017 and April 2018 — with the second EoI eliciting a better response.
However, with ONGC also deciding to sell its stake in the company as part of its strategy to exit non-core businesses, the sale of Pawan Hans was repackaged. Following this, in August 2018, the government invited fresh EoIs.
In FY18, average monthly deployment of helicopters by the firm was 30 out of the fleet size of 43. It has 17 Dauphin SA365N helicopters with average age of 31 years, forcing it to keep many of them grounded.
Pawan Hans’ competitors are Global Vectra Helicorp, Heligo Charters and Himalayan Heli Services.
Global Vectra Helicorp and US-based Continental Helicopters were understood to have expressed interest in Pawan Hans in April.
Over the past years, contracts with ONGC and state governments have provided a steady source of income (average 40-45% revenues from the oil and gas sector and around 35-40% revenues from state governments).