The boards of ONGC NSE -2.91 % has approved exiting helicopter service provider Pawan Hans by selling its entire 49 percent stake as it looks to cut debt and consolidate resources in core oil and gas business. Oil and Natural Gas Corp (ONGC) wants its interest to be clubbed with the 51 percent government stake that is already on offer for sale.
The Department of Disinvestment and Public Asset Management (DIPAM), which floated the offer for sale for government’s 51 percent stake in Pawan Hans twice in the last 10 months, is likely to issue an amended expression of interest (EoI) shortly. The board of directors of ONGC, at the 308th meeting held on June 29, accorded its in-principle approval for exploring options for the restructuring of ONGC group companies including exiting some with a view to consolidating business.
At that time, the company was told to get its board approval. Meanwhile, the government in early April withdrew its offer for sale as only two bidders including Indian helicopter major Global Vectra Helicorp and US-based Continental Helicopters made an offer. A revised offer for sale was floated later that month, which fetched about half a dozen bidders.
Pawan Hans operates seven Dauphin N3 Helicopters for ONGC’s offshore operations. These helicopters, based at Juhu airport, Mumbai and Rajahmundry, undertake passenger crew change service and production trips on a regular basis to meet the offshore requirements of the state-owned oil and gas producer. The government came out with a fresh information memorandum for the strategic sale of Pawan Hans on April 13 wherein bidders need to have a minimum net worth of Rs 500 crore. The memorandum was issued days after the government withdrew the previous note apparently due to a tepid response from investors.