The Union government has rightly suspended the sale of public sector helicopter service Pawan Hans after the credentials of lead partner in the buyer consortium, Almas Global Opportunity Fund, were questioned by the National Company. Law Tribunal (NCLT). The government will review the NCLT order before proceeding with the sale. NCLT’s Kolkata Bench had said that Almas Global failed to honor its winning bid to pay 568 crores to acquire EMC, a Kolkata-based power system solutions company. Accusing the company of taking the “insolvency resolution process for a ride”, the court sought action against its management under the Insolvency and Bankruptcy Code.
Since the sale of Pawan Hans has been passed over in silence, it would be prudent for the government to also look into other questions raised with regard to the eligibility criteria. It appears that Almas Global is not registered with market regulator SEBI, a requirement for it to invest in India. Second, does the buyer have the required minimum net worth of 300 crores, given that Pawan Hans is a large operator with around 41 helicopters? Of the three entities that make up the buyer consortium, Maharaja Aviation and Big Charter both have a small net worth of less than 10 crore. The net worth of lead partner Almas Global is unclear but it was unable to raise 568 crores for an acquisition initiated just a few months ago.
This episode also highlighted the need for proper processes in the sale of public sector assets. In another recent incident, the divestment in state-owned Central Electronics (CEL) was halted after allegations of undervaluation by the employees’ association. In the case of Pawan Hans, it is an established company connecting remote areas and offering helicopter services for emergency and rescue operations. Can these essential services be left to chance? Finally, a quick review of Pawan Hans’ finances shows that he was in the black until three years ago and only started making losses from the 2019 financial year after a few accidents. . Perhaps reviving the business is an option the government can consider.