The first phase of the privatization process is completed; Lucky Cement, Airblue and Arif Habib in the race
Bidders will submit their bids in sealed envelopes on Tuesday morning.
Three bids for the 75% stake in Pakistan International Airlines were submitted on Tuesday morning, with the first phase of the bidding process being completed at 11.15 am.
“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 pre-certified bidders Lucky Cement, private airline Airblue and investment firm Arif Habib. Fauji Fertiliser, among other bidders, has withdrawn from the competition.
The PC has received all bids by the December 22 deadline and, according to Muhammad Ali, the PC board will review and discuss PIA’s reserve price, the exact figure of which remains undisclosed. The government has stated that this privatization is crucial to the financial health of the airline and aims to inject significant investments to drive the company towards profitability.
Ali emphasized that once the board approves the reserve price, it will be sent to the Cabinet Committee for final approval.
The PC board meeting to determine the reference prices is currently underway.
“This is a very significant step,” Ali said. “There has been no major privatization of a national asset in the last 20 years, making this move historic for Pakistan.”
The session will resume today at 3:30 p.m. Approval of the reserve price by the Cabinet Committee will be the next important milestone.
Push for privatization
PIA, which has been operating at a loss for several years, has been subject to privatization by previous governments. The airline has struggled with mounting debt, aging fleets and an inability to keep pace with competition. Previous attempts at privatization have faced obstacles, but the current administration seems determined to move forward with this reform.
New investors must commit to invest Rs 80,000 crore in 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.
If any offer exceeds the reserve price, it will be opened. In the event of a lower offer, the highest bidder may 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 the PIA workforce, the PC has stated 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.
