After a botched attempt for Pawan Hans Ltd.'s sale, the government is likely to issue a fresh bid document by the end of May and provide indemnity to potential buyers against contingent liability of about Rs 500 crore in the helicopter service company.
The government decided to make the bid document more attractive after discussions with investors on their concerns. The Pawan Hans sale process failed to attract any suitors when a previous round of bidding ended on March 6.
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"The fresh preliminary information memorandum 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," a person familiar with the development said.
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The government holds 51 percent stake in Pawan Hans while the rest is with Oil and Natural Gas Corp. Ltd. The entire 100 percent stake in Pawan Hans, which has a fleet of 46 choppers, has been put on the block.
According to estimates of advisers to the Pawan Hans sale process, the 100 percent stake sale could fetch about Rs 100 crore to the government, said another person familiar with the deal.
The government had in April 2018 issued the information memorandum for offloading 51 percent stake in Pawan Hans and sought expression of interest from bidders by June 18. In July, ONGC decided to exit Pawan Hans as well.
In August, the government invited fresh expressions of interest from entities saying that along with its 51 percent stake, the bidders will also have the option to buy ONGC's stake of 49 percent in Pawan Hans. The last date for submission of EoIs was September 12.
The total number of bidders was not made public to maintain confidentiality of Pawan Hans stake sale process.
In February 2019, the government shared the final share purchase agreement with the shortlisted bidders of Pawan Hans and asked them to submit their financial bids by March 6.
The government has set a disinvestment target of Rs 90,000 crore for 2019-20, up 6% from Rs 84,972 crore collected through various stake sales in 2018-19.
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