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Hyderabad: A company with total assets of Rs 1,327.4 crore, Gross Carrying Value of Rs 1,124.6 crore, total revenues of Rs 401.71 crore, massive blocks of real estate, a sound business plan in place till 2026 and union government holding 51 per cent stakes in the company. Sounds like a hunky dory business situation, right?

But then the BJP government at the Centre has decided to shed its majority share-holding in the company for a measly bid of Rs 211.14 crore! And to whom? A consortium comprising unheard of and inaccesible firms including a funding company located in the notorious Cayman Islands that is involved with a Zimbabwean businessman, who is not above the board going by his history.

The company in question is Pawan Hans, the premier helicopter service firm that has a fleet of 42 choppers and huge investments in real estate that includes 243 flats in Mumbai. The union government, in what appears to be a rushed and hush-hush decision last week, approved sale of its stake to Star9 Mobility, a virtually unknown entity, pegging the total value of Pawan Hans at an unbelievable Rs 414 crore.

The BJP government’s decision to hive off its share in Pawan Hans is all the more suspicious since Star9 Mobility was incorporated just seven months ago – on October 29, 2021 – mentioning its operations as ‘support and auxiliary transport activities; activities of travel agencies.’ Star9 Mobility’s authorised capital (which is the maximum amount of share capital for which shares can be issued by a company) is Rs one lakh, and its paid-up capital (amount for which shares were issued to the shareholder for which payment was made by the shareholder) is also Rs one lakh. The company’s bid for Pawan Hans was above the reserve price of Rs 199.92 crore, which itself raises many eyebrows.

And who are the consortium members? Maharaja Aviation whose website could not be accessed! When one tries to visit the website, it only throws up the message: “Bandwidth limit exceeded. The server is temporarily unable to service your request …” Its Facebook page describes the company as ‘authorised Robinson helicopter dealer, service centre and helicopter owner cum operator.’ It owns just one Robinson R-44 piston engine helicopter and two new Robinson R-66 jet engine helicopters.

The posts, if one can call it that, on the website of Maharaja Aviation are mostly greetings. Its last post was on January 1, 2021- a new year wish (10 likes and 1 comment). It posted similar wishes on Diwali (Nov 15, 2020), Independence Day, Republic Day and again on new year. Interestingly, it mentions Acharya Bal Krishna, MD and CEO of Patanjali Auyrved (with wrong spelling), preacher Ramesh Bhai Ojha, Baba Ramdev and actor Akshary Kumar in its guest list. Is there a connection here?

Another consortium company is ‘Big Charter,’ incorporated on December 13, 2014 with its registered office in Mumbai. It’s a company limited by shares having an authorised capital of Rs 15 crore and operates in the aviation Industry. And no further details are available.

The third company in the consortium and perhaps the most dubious is Almas Global Opportunity Fund SPC, a firm registered in the tax haven Cayman Islands. The funding company is allegedly involved in an issue with Kudakwashe Tagwirei, a Zimbabwean businessman and presidential advisor accused of corruption. What makes the involvement of this company in the consortium all the more interesting is that fact that the US imposed sanctions on Kudakwashe Tagwirei accusing him of being corrupt.

It is against this dark background of the consortium seeking to take control of Pawan Hans that the decision of the BJP government becomes not just questionable but begs investigation at the highest level.

Take a look at Pawan Hans assets. Apart from 42 helicopters, it has residential quarters in Mumbai – 192 in Juhu, six in Andheri West, 42 in Kandivali East and three in Malad for a total of 243 flats. Extrapolating the market value of Rs three crore for each flat, the total value of these works out to about Rs 730 crore. Besides, Pawan Hansa Noida office is worth Rs 37 crore. The value of these real estate assets alone work out to an impressive Rs 767 crore.

As per the annual report for the year ended March 2021, its gross carrying value (asset value minus depreciation over time) was Rs 1,124.6 as on March 31, 2021. It was Rs 1063.3 crore for the year ended March 31, 2020 and Rs 1016.06 crore as on April 1, 2019.

Its total assets were Rs 1,327.4 crore as on March 31 2021, including Rs 1,330.7 crore on March 31 2020 and Rs 1,421.9 crore as on April 1, 2019. This included non-current assets (long term assets like property, plant, equipment, capital work in progress, investments, loans, and others) that was pegged at Rs 821.67 crore (March 2021), Rs 827.47 crore (March 2020) and Rs 852.84 crore (April 2019).

The current assets (short term assets which can be converted into cash in a year or so including inventories, trade receivables, cash and cash equivalents, bank balances and others) were pegged at Rs 505.7 crore (March 2021), Rs 503.2 crore (March 2020) and Rs 569.1 crore (April 2019).

The total revenues were Rs 401.71 crore in 2020-21 including Rs 372.9 from operations and Rs 28.8 crore from other income. The operating profit was Rs 18.71 crore and profit after tax was Rs 17.7 crore. In 2019-20, the total revenues were Rs 376.75 crore including Rs 345.9 crore from operations and Rs 30.8 crore from other income.

Pawan Hans reported an operating loss of Rs 83.76 crore and a net loss of Rs 18.53 crore, as per its annual report 2020-21. In percentage terms, revenue from operations increased by 7.8 per cent compared to the previous financial year and loss from operations decreased from Rs 83.76 crore to Rs 18.7 crore. Reserves and surplus of the company stood at Rs 424.07 crore (previous year Rs 441.78 crore).

The company’s fleet includes 42 helicopters of which five Dauphin SA365N helicopters were placed under impairment. In effect, it had 37 helicopters in its fleet, and the average monthly deployment of helicopters during the year ended March 31, 2021, was 28 helicopters. The total flying hours in 2020-21 dropped reduced to 14,454 hours as against 18,271 hours the previous year, mainly on account of Covid pandemic.

Questions are also being raised on the pause enforced by the BJP government on the expansion plans of the company. Pawan Hans’ efforts to augment fleet by procuring four light helicopters and two heavy duty helicopters with 20 per cent funding from internal resources and 80 per cent through term loan from banks failed to materialise due to the hold on capital investment decisions in view of the disinvestment process.

The manpower as on March 31 2021 was 655. It was 690 as on March 31 2020. This included 119 pilots, 99 aircraft maintenance engineers, 1 flight engineer, 59 executives, 137 technicians and 240 other technical and non-technical employees.

Pawan Hans had a healthy six year Business Plan chalked out for 2021-2026 with plans to acquire 20 helicopters through leasing and phasing out eight old helicopters. It wanted to focus on operation and maintenance contracts for helicopters owned by others, heliports and heli hubs, seaplane operations, consultancy and project management for heliports with various States and tourism/pilgrimage areas.

So, the million dollar question is why does the BJP government at the Centre want to divest its stakes in a healthy company?


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Author: Howard Caldwell