The first phase of the privatization process is completed; Lucky Cement, Airblue, Arif Habib in the race
Bidders submit sealed bids Tuesday morning.
Three bids were submitted on Tuesday morning for the 75% stake in Pakistan International Airlines, with the first phase of the bidding process completed at 11:15 am.
“The first phase of the tender process has been completed; the matter will now be referred to the Privatization Commission,” said Privatization Commission (PC) Chairman Muhammad Ali.
The bids came from pre-certified bidders Lucky Cement, private airline Airblue and investment firm Arif Habib. Fauji Fertiliser, among other bidders, withdrew from the race.
The PC received all bids before the December 22 deadline and, according to Muhammad Ali, the PC board will review and discuss PIA’s reserve price, the exact amount of which was not disclosed. The government has said that this privatization is crucial for the financial health of the airline and aims to inject significant investment to bring the company towards profitability.
Ali stressed that once the reserve price is approved by the board, it will be sent to the Cabinet committee for final approval.
The PC Board meeting is currently underway to determine the benchmark prices.
“This is a very important step,” Ali said. “No major privatization of a national asset has taken place in the last 20 years, making this decision historic for Pakistan.”
The session will resume at 3:30 p.m. today. The approval of the reserve price by the Cabinet Committee will be the next major step.
Push for privatization
PIA, which has been operating at a loss for several years, was targeted for privatization by previous governments. The airline is struggling with mounting debts, obsolete fleets and an inability to keep pace with the competition. Past attempts at privatization have faced obstacles, but the current administration appears determined to move forward with this reform.
New investors must 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.
If a 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, they will have 90 days to purchase the remaining 25% of shares.
In a bid to protect the PIA workforce, the CP said the 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.
