PIA Privatisation Bidding Advances with Strong Investor Interest

ISLAMABAD: The first phase of bidding for the sale of a 75 percent stake in Pakistan International Airlines (PIA) was completed on Tuesday, though the opening of bids was delayed by an hour from the scheduled time of 3:30 pm.

Three major consortiums are competing for the airline’s shares. In the second phase of bidding, the Arif Habib consortium offered Rs121 billion, while the Lucky Consortium submitted a bid of Rs120 billion. Earlier bids submitted by pre-qualified parties included Lucky Cement at Rs101.5 billion, Airblue at Rs26.5 billion, and the Arif Habib consortium at Rs115 billion.

Following the conclusion of the first round, a second round of auction commenced, as bids from Arif Habib and Lucky Cement exceeded the reference price of Rs100 billion.

Addressing the ceremony, Finance Minister Muhammad Aurangzeb said the government has consistently encouraged private sector participation, calling it essential for economic revival. Adviser to the Prime Minister on Privatisation, Muhammad Ali, also spoke at the event, expressing hope that PIA’s privatisation would pave the way for greater investment in the country. He thanked all bidders who participated in the process.

During the public ceremony in Islamabad, broadcast live on state television, representatives of bidding groups deposited sealed bids into a transparent box. The reference price will now be reviewed and approved by the Privatisation Commission Board and the Cabinet Committee on Privatisation.

Earlier, the federal cabinet ratified decisions of the Cabinet Committee on Privatisation regarding PIA’s privatisation in a meeting chaired by Prime Minister Shehbaz Sharif. The cabinet also offered prayers for the smooth completion of the process. Fauji Fertilizers opted out of the auction.

Under the plan, 92.5 percent of the proceeds from the auction will be reinvested in PIA, while 7.5 percent will go to the national exchequer. An immediate investment of Rs80 billion will be required after privatisation, and the government will retain a 25 percent stake. The successful bidder may choose to purchase this remaining share or leave it with the government.

The buyer will receive exemptions from sales tax on new aircraft purchases and will not be required to pay outstanding dues to the Pakistan Aviation Authority or the Federal Board of Revenue. After cabinet approval, legal formalities will be completed by the Privatisation Commission.

Read more:PIA goes under Hammer Today as Govt Opens Bids for 75% Stake

PIA’s name and status as the national flag carrier will remain unchanged. Of its 34 aircraft, 18 are currently operational, with plans to double the fleet within three to four years. The airline has agreements with 97 countries and landing rights in more than 170 destinations.

Employee jobs will be protected for one year, while retired employees will continue to receive pensions and benefits. PIA’s workforce has reduced from 11,500 employees in 2011 to around 6,500.

Speaking to the media, Adviser Muhammad Ali termed the privatisation a historic milestone, noting that no state-owned enterprise had been privatised in the past two decades. The Privatisation Commission Board has now forwarded recommendations on the reference price to the Cabinet Committee on Privatisation, after which the sealed bids will be opened in the second round, to be broadcast live.

The Privatisation Commission stated that the bidding process reflects transparency, efficiency, and accountability, reinforcing public trust in the privatisation of PIA.