ISLAMABAD:
Pakistan International Airlines will auction 75% of its shares on Tuesday in Islamabad, marking a significant step towards privatization of the airline. The selected bidder will have a period of 90 days to purchase the remaining 25% of the shares.
According to Privatization Commission sources, the potential new investor has to commit an investment of Rs 80,000 crore over the next five years. Of the proceeds from the sale of 75% of PIA shares, 92.5% will go to the airline for reinvestment, while the remaining 7.5% will be transferred to the government.
The Privatization Commission board will first approve the reserve price, after which the Cabinet Privatization Committee will give final approval. Groups of pre-qualified bidders must submit their bids between 10:45 a.m. and 11:15 a.m. Tuesday. Sealed bids will be opened publicly at 3:30 p.m. in the presence of the media.
If any offer 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, he or she will have 90 days to purchase the remaining 25% of the shares.
In a move to safeguard PIA’s workforce, the Privatization Commission has declared that job security of employees will be guaranteed for one year. In addition, the holding company will be responsible for managing 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 only be offered to the winning bidder at a 12% premium over the offer price, with the option to make payment a year later.
The government also decided to take only 7.5% of the bid money in cash, while the bidder will invest the remaining 92.5% in the PIA company instead of depositing it in the treasury, government officials said. The express PAkGazette. During the last failed attempt, the bidder had the option of paying 15% of the bid money in cash.
The decision to sell a 100% stake was taken after bidders sought that the government would have no role in PIA’s affairs once the successful bidding took place on December 23, according to Privatization Commission officials.
