Pak govt stepping up efforts to sell cash-strapped PIA

Pakistan plans to sell a majority stake in its debt-laden national airline, PIA, by end-2025 after a failed 2023 attempt. Four local firms have been pre-qualified for bidding, with the process expected to conclude in the year's final quarter

Islamabad: Pakistan’s government is firming up efforts to sell Pakistan International Airlines by the end of 2025, following a botched bid to sell the loss-making national flag-carrier last year, according to a media report on Wednesday.

The Privatisation Commission board on Tuesday declared four local parties, including three associated with the cement business, eligible for bidding for the acquisition of the airline, The Express Tribune newspaper reported.

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In its previous attempt, the government had set the minimum price at Rs 85.03 billion with a Rs 45 billion negative balance sheet; however, it only managed to secure an offer of Rs 10 billion. The Privatisation Commission board, which met under the chairmanship of Adviser to the Prime Minister on Privatisation Muhammad Ali, approved the pre-qualification of four interested parties for the divestment of Pakistan International Airlines Corporation Limited (PIACL), according to a press statement.

The board reviewed recommendations of the pre-qualification committee based on the evaluation of Statements of Qualification (SOQs) submitted by five prospective investors. Of these, one could not qualify for bidding.

The commission said that the pre-qualified parties would now proceed to the buy-side due diligence phase – a critical step in the transparent and competitive privatisation process. PIA’s bidding is expected to take place in the last quarter (October-December) of the current calendar year, Muhammad Ali said.

The government wants to sell the majority shares in PIA along with management control. It has offloaded more debt from the balance sheet, which should positively impact the minimum price.

Meanwhile, the ban on the airline’s operations to the EU has been lifted. The PIA has been in financial crisis for many years now. The issues came to the fore in 2023 when 7,000 employees of PIA did not receive their salaries for November 2023. Before this, the European Union banned PIA in 2020 over safety concerns.