ISLAMABAD: The federal government has received three bids for the sale of a majority stake in state-owned Pakistan International Airlines (PIA) during a televised auction, as part of long-delayed reforms required under Pakistan’s agreement with the International Monetary Fund (IMF).
This was Pakistan’s second televised attempt to privatise PIA. A similar effort last year failed after only one low bid was received, well below the government’s set price, ending hopes of the country’s first major privatisation in nearly 20 years.
The bidders include three groups. One consortium is led by Lucky Cement Limited, along with Hub Power Holdings Limited, Kohat Cement Company Limited and Metro Ventures.
Another group is led by Arif Habib Corporation Limited and includes Fatima Fertiliser Company Limited, City Schools and Lake City Holdings Limited. The third bidder is private airline Airblue.
The sealed bids were deposited one by one during a live broadcast on state television and placed into a transparent box. The bids are scheduled to be opened at a formal ceremony starting at 3:30pm, attended by representatives of the bidding groups.
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Officials said the bidding for a 75% stake in PIA will take place in two phases, with a second open-bidding ceremony planned later in the day.
Prime Minister Shehbaz Sharif welcomed the process and thanked the ministers and the Privatisation Commission for ensuring transparency. He also asked cabinet members to attend the second ceremony.
Meanwhile, Fauji Fertiliser Company, earlier considered a strong contender, formally withdrew from the bidding process last week.
Under the deal structure, 92.5% of the amount paid for the 75% stake will be invested back into PIA, while 7.5% will go to the government. The government will retain a 25% stake, which the winning bidder may buy later or leave with the state.
Officials said the structure allows investors to choose between partial or full ownership. Only bidders taking part in the auction can join the winning group later.
The winning bidder will be required to pay two-thirds of the bid amount within 90 days, while the remaining one-third can be paid within 12 months.
The government has guaranteed job security for PIA employees for 12 months. Pension payments, medical benefits and other post-retirement costs will be handled by the holding company, while salaries and current benefits will be paid by the new owners.
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PIA operates flights to 78 destinations and holds around 170 landing slots worldwide. Officials said the airline urgently needs new investment and professional management to improve its performance.
Last year, the government set a minimum price of $305 million for a 60% stake but received only one bid of $36 million, which was later withdrawn due to concerns over the airline’s finances.
Since then, PIA’s situation has improved. The government has taken over most of its old debt, the airline has reported its first pre-tax profit in 20 years, and flight bans imposed by Britain and the European Union have been lifted.
Officials and analysts believe the reopening of key international routes could boost revenues and support a higher valuation this time.
The sale of PIA is part of a wider privatisation programme under Pakistan’s IMF bailout, which also includes plans to sell stakes in state-owned banks, power distribution companies and other loss-making public entities.
