ISLAMABAD:
The government is set to auction 75% of Pakistan International Airlines’ shares on Tuesday in Islamabad, marking a significant step towards privatization of the airline. The successful bidder will have 90 days to purchase the remaining 25% of shares.
According to Privatization Commission sources, the potential new investor will have to commit to investing Rs 80 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.
The board of directors of the Privatization Commission will first approve the reserve price, after which the Ministerial Committee on Privatization will give final approval. Groups of pre-qualified bidders must submit their bids on Tuesday between 10:45 a.m. and 11:15 a.m. The sealed bids will be opened publicly at 3:30 p.m. in the presence of the media.
If a bid exceeds the reserve price, it will be opened. In the event of a lower bid, the highest bidder will have the opportunity to match the price. Once the successful bidder is identified, they will have 90 days to purchase the remaining 25% of shares.
In a bid to protect PIA’s workforce, the Privatization Commission said that job security of employees would be guaranteed for one year. Additionally, the holding company will be responsible for managing the pension plans and post-retirement benefits.
Earlier, the government had decided to sell its 100% stake in PIA, but a quarter of the shares will be offered to the successful bidder only at a 12% premium over the bid price, with an option to make payment a year later.
The government has also decided to accept only 7.5% of the bid amount in cash, while the bidder will invest the remaining 92.5% in the PIA company instead of depositing it in the state exchequer, government officials said. The Express PK Press Club. In the last unsuccessful attempt, the bidder had the option to pay 15% of the bid amount in cash.
The decision to divest 100% stake was taken after bidders no longer sought to play a role for the government in PIA’s affairs once the tender was won on December 23, according to Privatization Commission officials.
