Thursday, July 19, 2018

Board of ONGC to Sell Entire 49% Stake in Helicopter Service Provider - Pawan Hans

The board of ONGC has approved exiting helicopter service provider Pawan Hans by selling its entire 49% stake, as it looks to cut debt and consolidate resources in core oil and gas business, officials with direct knowledge of the development said.

Oil and Natural Gas Corporation (ONGC) wants its interest to be clubbed with the 51% government stake that is already on offer for sale, they said.

The Department of Disinvestment and Public Asset Management (DIPAM), which floated the offer for sale for the government’s 51% stake in Pawan Hans twice in the last 10 months, is likely to issue an amended Expression of Interest (EoI) shortly.

Officials said that ONGC of the view that its investment in Pawan Hans is no longer strategic as it charter hires helicopters to ferry staff to its oil and gas locations, mostly in offshore, through competitive bidding. Of the 22 helicopters it currently has on hire, just seven or less than a third are from Pawan Hans. Pawan Hans owns a fleet of 46 helicopters.

“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,” an official said.

“The idea being to focus resources on core oil and gas exploration and production business and not scatter bandwidth of management in unrelated businesses,” the official added.

Officials said when the government had first floated an offer to sell its 51% stake in October last year, ONGC made an offer to DIPAM that its 49% stake be also sold on same terms.

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.

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