Pakistan Launches Auction to Sell 75% Stake in PIA to Attract Investment

EcoPulse24

Pakistan's Privatisation Commission today initiated the sale of a 75% government stake in Pakistan International Airlines (PIA), representing the second attempt to privatize the financially struggling national carrier.

Closed bids from pre-qualified investors began at 10:30 a.m.

Pakistan time, with envelopes to be opened and the winner announced at an official ceremony broadcast live at 3:30 p.m.

Three consortiums are competing after Fauji Fertiliser withdrew two days ago for not submitting the required guarantee deposit.

The remaining bidders include a group led by Lucky Cement with several industrial partners, Air Blue in partnership with Lake City Holdings, and a consortium led by Arif Habib Group joined by AKD Group since last November.

The government expects bids to exceed 100 billion Pakistani rupees, with 92.5% of the proceeds earmarked for PIA's development and the remaining 7.5% for the government.

The government will retain a 25% stake, with an option to sell it later at an additional price. A five-year plan aims to double PIA's fleet from 18 to 38 aircraft and increase annual passenger numbers from 4 million to 7 million by expanding routes and services.

The airline will benefit from an 18% tax exemption on leasing new aircraft, and staff employment is guaranteed for at least one year post-privatization, with possible later adjustments under a restructuring plan.

This privatization is part of Prime Minister Muhammad Shehbaz Sharif's economic reform agenda to save the national carrier, burdened by $2.31 billion in debt and holding air service agreements with 97 countries and landing rights at major global airports.