First phase of privatisation process completes; Lucky Cement, Airblue, Arif Habib in the race
Bidders submit sealed bids Tuesday morning.
Three bids were submitted Tuesday morning for the 75% stake in Pakistan International Airlines, with the first phase of the bidding process completed as of 11.15am.
“The first phase of the bidding process has been completed; now the matter will go to the Privatization Commission,” said Privatization Commission (PC) Chairman Muhammad Ali.
The bids came from Lucky Cement, private airline Airblue and investment firm Arif Habib. Fauji Fertiliser has pulled out of the running.
The PC has received all bids by the December 22 deadline, and according to Muhammad Ali, the PC board will review PIA’s reserve price, a value that is as of yet unknown. The government has stated that this privatisation is crucial for the airline’s financial health and aims to inject significant investment to steer the company towards profitability.
Ali emphasised that once the reserve price is approved by the board, it will be forwarded to the Cabinet Committee for final approval.
“This is a very significant step,” Ali said. “No major privatisation of a national asset has taken place in the last 20 years, making this move historic for Pakistan.”
The session will resume at 3.30pm today. The Cabinet Committee’s approval of the reserve price will be the next major milestone.
Push for privatisation
PIA, which has been operating at a loss for several years, has been a target for privatisation by previous governments. The airline has struggled with mounting debts, outdated fleets, and an inability to keep pace with the competition. Past attempts at privatisation have faced obstacles, but the current administration appears determined to push ahead with this reform.
New investors are required to commit an investment of Rs80 billion over the next five years. Of the proceeds from the sale of 75% of PIA’s shares, 92.5% will be allocated to the airline for reinvestment, while the remaining 7.5% will be transferred to the government.
If any bid exceeds the reserve price, it will be opened. In the event of a lower bid, the highest bidder will be allowed to match the price. Once the successful bidder is identified, the bidder will have 90 days to purchase the remaining 25% of shares.
In a move to safeguard PIA’s workforce, the PC has stated that employee job security will be guaranteed for one year. Additionally, the holding company will be responsible for managing pension plans and post-retirement benefits.
