The federal government is set to determine the percentage of shares for Pakistan International Airlines Company Ltd (PIACL) that will be sold, following the submission of bids from the six shortlisted bidders. These bidders are currently conducting thorough due diligence to evaluate the airline’s financial health.
In April 2024, the Privatization Commission invited Expressions of Interest (EOI) from potential buyers for acquiring 51-100 percent of PIACL’s equity, along with management control. This move aims to revitalize the airline and improve its operational efficiency.
During a media briefing on Wednesday, Minister for Privatization Aleem Khan explained that the extent of equity in PIACL to be sold will be determined based on the interest expressed by the bidders. The government’s share in the airline will be decided accordingly.
Secretary of the Privatization Commission, Usman Akhtar Bajwa, elaborated that the due diligence process had begun in the last couple of weeks. The business plan of PIACL, which projects significant profitability, was shared with the interested parties. This step is crucial to ensure that potential buyers have a comprehensive understanding of the airline’s future prospects.
Responding to inquiries about the ban on PIA flights, Bajwa acknowledged that bidders had expressed concerns. To address these issues, a meeting was arranged with the Aviation Division. He also noted that foreign aviation authorities had raised some reservations regarding aviation regulations, which are being actively addressed.
The Roosevelt Hotel in New York, Bajwa mentioned that three options are under consideration by the federal cabinet: running the hotel as a joint venture, leasing it out, or selling it outright. An Expression of Interest (EOI) for this will be invited by the end of July.
In addition to PIACL and the Roosevelt Hotel, the commission is negotiating a single-source transaction for the privatization of House Building Finance Company Ltd (HBFC). The sole pre-qualified investor for this deal is Pakistan Mortgage Refinance Company Ltd (PMRCL). The bidding process for HBFC is expected to be completed by the end of the current month.
The privatization of First Women Bank Limited (FWBL) will be conducted under a government-to-government arrangement, with the UAE government being asked to nominate an entity to negotiate with the Pakistani side. Discussions with the Power Division are also ongoing concerning the privatization of power generation and distribution companies, with technical assistance provided by the World Bank.
Minister Aleem Khan clarified that the Finance Division, not the Privatization Commission, set the privatization revenue target of Rs30 billion for the current fiscal year. Secretary Privatization Division Jawad Paul added that the Cabinet Committee on Privatization (CCoP) approved 24 entities for privatization on May 10, 2024. Additionally, 41 entities have been referred to the Cabinet Committee on State Owned Enterprises (CCoSOEs) for categorization as per the SOE Act/Policy. More entities are expected to be added to the active list of privatizations based on the recommendations of CCoSOEs.
