A consortium led by Arif Habib Corporation acquired PIA in the auction, placing the highest bid of 135 billion Pakistani rupees
Pakistan, grappling with financial crisis, has successfully completed the auction of 75 percent of the shares of its national airline Pakistan International Airlines (PIA). In the auction, which was telecast live in Islamabad on Tuesday, a consortium led by Arif Habib Corporation secured the highest bid of 135 billion Pakistani rupees. This is considered to be Pakistan’s biggest privatization deal in the last two decades and is part of the terms of a $7 billion bailout package from the International Monetary Fund (IMF).
The PIA auction was conducted in two stages. In the first stage, three bidders submitted their bids in sealed envelopes.
The Arif Habib Consortium (comprising Fatima Fertilizer, City Schools, and Lake City Holdings) bid 115 billion rupees.
The Lucky Cement Consortium (comprising Hub Power and Kohat Cement) offered 101.5 billion rupees.
Private airline Airblue bid 26.5 billion rupees.
The government had set a reference price of 100 billion rupees, leading to Airblue’s elimination in the first stage.
The second open round saw intense competition between the Arif Habib and Lucky Cement consortiums. The Lucky Consortium increased its bid to 134 billion rupees, but the Arif Habib Consortium secured the deal with a final bid of 135 billion rupees. After losing, the Lucky Consortium congratulated the winner.
Under the deal, 92.5 percent of the total amount will be spent on restructuring and reforming PIA, while the government will get only 7.5 percent, or about Rs 10 billion.
Prime Minister Shahbaz Sharif thanked the Privatization Commission and relevant officials at a cabinet meeting for the transparent process. He stated that this is the largest transaction in Pakistan’s history.
Finance Minister Muhammad Aurangzeb expressed satisfaction that all bidders were Pakistani, saying this would boost the confidence of domestic and foreign investors. Meanwhile, Privatization Advisor Muhammad Ali clarified that the government’s aim is not simply to sell PIA, but to make it strong and self-reliant.
PIA has been running at significant losses for the past several years. Poor management, mounting debt, limited flights, and an aging fleet of approximately 32 aircraft have led to a worsening of the airline’s situation. Last year’s auction failed because the only bid was below the reference price. This time, under pressure from the IMF, the government accelerated the privatization process. Initially, the Fauji Fertilizer Company (affiliated with the military) was also involved in the bidding process, but it withdrew in the final stages.
