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Reuters
a day ago
- Business
- Reuters
Pakistan draws five potential buyers for national airline PIA, including military-backed group
ISLAMABAD, June 19 (Reuters) - In its efforts to sell its struggling national airline, Pakistan has received expressions of interest from five parties, including business groups and a military-backed firm, the Privatisation Ministry said on Thursday. The bids were submitted ahead of a June 19 deadline to acquire up to 100% of Pakistan International Airlines ( opens new tab, which has accumulated over $2.5 billion in losses in roughly a decade. Still, following a major restructuring, it posted its first operating profit in 21 years in the year through June 2024. The sale is seen as a test of Pakistan's ability to shed loss-making state firms and meet conditions of a $7 billion International Monetary Fund bailout. It would be the country's first major privatisation in nearly two decades. Eight parties submitted their expression of interests, but only five of them provided documents of qualification, the ministry said in a statement. Among the five groups is a consortium of major industrial firms: Lucky Cement Ltd ( opens new tab, Hub Power Holdings Ltd ( opens new tab, Kohat Cement Co Ltd ( opens new tab and Metro Ventures. Another is led by investment firm Arif Habib Corp Ltd ( opens new tab, and includes fertiliser producer Fatima Fertilizer Co Ltd ( opens new tab, private education operator The City School, and real estate firm Lake City Holdings. Fauji Fertilizer Company Ltd , a military-backed conglomerate, Pakistani airline Airblue Ltd and a consortium that includes Bahria Foundation, domestic carrier Serene Air and U.S.-based Equitas Capital LLC also submitted documents. "The government will review the documents and give qualified parties access to data for due diligence," the statement read. Once a leading global airline, PIA resumed European flights in January after a four-year EU ban linked to safety concerns, and is seeking UK clearances, seen as key to its turnaround. Industry insiders say the winning bidder is expected to partner with a foreign airline to run operations. A previous attempt to sell the airline failed as a $36 million bid from real estate firm Blue World City fell short of the $305 million floor price, with concerns over debt, staffing, and limited control. This time, the government is offering full divestment, has scrapped the sales tax on leased aircraft, and is providing limited protection from legal and tax claims. Around 80% of the airline's debt has been transferred to the state. "We're targeting 86 billion rupees in privatisation proceeds this year," Privatisation Minister Muhammad Ali told Reuters. "For PIA, in the last round of bidding, 15% of the proceeds were going to the government, with the rest staying within the company." He said bidders would be pre-qualified in early July, with due diligence lasting 2 to 2.5 months, and final bidding and negotiations expected in the fourth quarter of 2025. Officials hope the sale will revive the stalled privatisation drive. Other planned deals include the Roosevelt Hotel and several power firms, by mid-2026. "From the Roosevelt Hotel, we're expecting over $100 million as first payment during this year," said Ali.
Arab News
a day ago
- Business
- Arab News
Five groups submit qualification documents in Pakistan's renewed push to privatize PIA
KARACHI: Pakistan has received qualification documents from five investor groups seeking to acquire a controlling stake in its loss-making national carrier, the Privatization Commission said on Thursday, as the government advances a long-delayed divestment plan. The privatization of state-owned entities has been mandated by the International Monetary Fund (IMF) as Pakistan works to implement structural reforms and stabilize its economy, which has recently shown signs of macroeconomic improvement. Pakistan International Airlines (PIA), in particular, has survived for years on government bailouts, placing further strain on the country's already cash-strapped finances. The government invited expressions of interest in April for a stake ranging from 51 percent to 100 percent in Pakistan International Airlines Corporation Limited (PIACL), along with management control. The final deadline for submitting Statements of Qualification (SOQs) was today. 'The Privatization Commission received Expression of Interest (EOI) from ... eight interested parties,' the official statement said, adding that 'five interested parties submitted SOQs by the deadline today.' Among the groups that submitted documents are a consortium comprising Lucky Cement, Hub Power Holdings, Kohat Cement, and Metro Ventures; a consortium led by Arif Habib Corporation with Fatima Fertilizer, City Schools and Lake City Holdings; Air Blue Limited; Fauji Fertilizer Company Limited, which is a military-backed firm; and a consortium including Serene Air, Augment Securities, Bahria Foundation, Mega C&S Holding and Equitas. The government had previously attempted to privatize PIA in 2024 but called off the process after receiving a single bid of Rs10 billion ($36 million) from Blue World City — far below the Rs85 billion ($305 million) floor price. The sale was scrapped, citing the airline's weak financial position and unattractive terms for buyers. PIA has long been a fiscal liability, with operational earnings repeatedly offset by heavy debt servicing. However, following restructuring, it reported an operating profit of Rs9.3 billion ($33.1 million) in April, its first in 21 years. 'The SOQs submitted by the parties will be evaluated by the Privatization Commission against the prequalification criteria,' the official statement informed. 'The prequalified parties will proceed to the next stage where they will be given access to the virtual data room to undertake buy-side due diligence.'
Arab News
2 days ago
- Business
- Arab News
Pakistan's PIA sale draws interest from leading firms, army company ahead of deadline
ISLAMABAD: Two of Pakistan's leading business groups and a company backed by the powerful military will bid for the country's ailing national carrier, a divestment the government hopes will kickstart the privatizations of state-owned enterprises. The sale of Pakistan International Airlines will be the first major privatization for around two decades, with the sale of loss-making state-owned enterprises a condition of last year's $7 billion bailout by the International Monetary Fund. The government tried unsuccessfully to last year offload a stake in PIA, which is a major burden on its budget, but the sale was aborted because of the poor state of the airline and the conditions attached to any purchase. Expressions of interest are due by Thursday for an up to 100 percent stake in the airline, with industry insiders expecting more bidders to emerge. They say the deal has been sweetened with a tax incentive and bolstered by signs of a turnaround in PIA's fortunes. The Ministry of Privatization did not respond to a request for comment. Among those planning bids are the Yunus Brothers Group, owners of the Lucky Cement and energy companies; and a consortium led by Arif Habib Limited that includes Fatima Fertilizer, Lake City, and The City School, sources within the companies said. Fauji Fertilizer Company, which is part-owned by the military, said it will be making an expression of interest, in a notice to the Pakistan Stock Exchange. Fertilizer production is a lucrative sector in Pakistan. A group of PIA employees has also come forward to bid. 'The employees will use their provident fund and pension, in addition to finding an investor to place a bid. We're doing this to save jobs and turn around the company,' said Hidayatullah Khan, president of the airline's Senior Staff Association. The airline was restructured last year, offloading approximately 80 percent of its legacy debt to the government to make it more attractive to investors. But bidders remain concerned about overstaffing and the ability to fire employees. Last year's sale effort failed when the sole bid of $36 million fell far short of a $305 million floor price. Interested parties walked away before bidding, partly because the government was not willing to give up 100 percent of the company, with bidders saying they did not want the government to remain involved. Since then, PIA has posted its first operating profit in 21 years, driven by cost-cutting reforms, after making cumulative losses of $2.5 billion. This success of the current process will depend on whether the government is willing to give up a 100 percent stake, industry insiders said. They added that a government decision this month to remove the requirement of paying sales tax upfront on the lease of new aircraft, which had been an impediment, will make the deal more attractive. PIA resumed flights to Europe in January after the European Union lifted a four-year safety ban. The airline has also approached UK authorities for permission to resume services to London and Manchester. The restoration of international routes is vital to future growth opportunities and successful bidders are likely to bring in foreign airlines as operators.
CNA
2 days ago
- Business
- CNA
Pakistan's PIA sale draws interest from leading firms, army company ahead of deadline
ISLAMABAD :Two of Pakistan's leading business groups and a company backed by the powerful military will bid for the country's ailing national carrier, a divestment the government hopes will kickstart the privatisations of state-owned enterprises. The sale of Pakistan International Airlines will be the first major privatisation for around two decades, with the sale of loss-making state-owned enterprises a condition of last year's $7 billion bailout by the International Monetary Fund. The government tried unsuccessfully to last year offload a stake in PIA, which is a major burden on its budget, but the sale was aborted because of the poor state of the airline and the conditions attached to any purchase. Expressions of interest are due by Thursday for an up to 100 per cent stake in the airline, with industry insiders expecting more bidders to emerge. They say the deal has been sweetened with a tax incentive and bolstered by signs of a turnaround in PIA's fortunes. The Ministry of Privatisation did not respond to a request for comment. Among those planning bids are the Yunus Brothers Group, owners of the Lucky Cement and energy companies; and a consortium led by Arif Habib Limited that includes Fatima Fertiliser, Lake City, and The City School, sources within the companies said. Fauji Fertilizer Company, which is part-owned by the military, said it will be making an expression of interest, in a notice to the Pakistan Stock Exchange. Fertiliser production is a lucrative sector in Pakistan. A group of PIA employees has also come forward to bid. "The employees will use their provident fund and pension, in addition to finding an investor to place a bid. We're doing this to save jobs and turn around the company," said Hidayatullah Khan, president of the airline's Senior Staff Association. The airline was restructured last year, offloading approximately 80 per cent of its legacy debt to the government to make it more attractive to investors. But bidders remain concerned about overstaffing and the ability to fire employees. Last year's sale effort failed when the sole bid of $36 million fell far short of a $305 million floor price. Interested parties walked away before bidding, partly because the government was not willing to give up 100 per cent of the company, with bidders saying they did not want the government to remain involved. Since then, PIA has posted its first operating profit in 21 years, driven by cost-cutting reforms, after making cumulative losses of $2.5 billion. This success of the current process will depend on whether the government is willing to give up a 100 per cent stake, industry insiders said. They added that a government decision this month to remove the requirement of paying sales tax upfront on the lease of new aircraft, which had been an impediment, will make the deal more attractive. PIA resumed flights to Europe in January after the European Union lifted a four-year safety ban. The airline has also approached UK authorities for permission to resume services to London and Manchester. The restoration of international routes is vital to future growth opportunities and successful bidders are likely to bring in foreign airlines as operators.
Yahoo
2 days ago
- Business
- Yahoo
Pakistan's PIA sale draws interest from leading firms, army company ahead of deadline
By Ariba Shahid and Saeed Shah ISLAMABAD (Reuters) -Two of Pakistan's leading business groups and a company backed by the powerful military will bid for the country's ailing national carrier, a divestment the government hopes will kickstart the privatisations of state-owned enterprises. The sale of Pakistan International Airlines will be the first major privatisation for around two decades, with the sale of loss-making state-owned enterprises a condition of last year's $7 billion bailout by the International Monetary Fund. The government tried unsuccessfully to last year offload a stake in PIA, which is a major burden on its budget, but the sale was aborted because of the poor state of the airline and the conditions attached to any purchase. Expressions of interest are due by Thursday for an up to 100% stake in the airline, with industry insiders expecting more bidders to emerge. They say the deal has been sweetened with a tax incentive and bolstered by signs of a turnaround in PIA's fortunes. The Ministry of Privatisation did not respond to a request for comment. Among those planning bids are the Yunus Brothers Group, owners of the Lucky Cement and energy companies; and a consortium led by Arif Habib Limited that includes Fatima Fertiliser, Lake City, and The City School, sources within the companies said. Fauji Fertilizer Company, which is part-owned by the military, said it will be making an expression of interest, in a notice to the Pakistan Stock Exchange. Fertiliser production is a lucrative sector in Pakistan. A group of PIA employees has also come forward to bid. "The employees will use their provident fund and pension, in addition to finding an investor to place a bid. We're doing this to save jobs and turn around the company," said Hidayatullah Khan, president of the airline's Senior Staff Association. The airline was restructured last year, offloading approximately 80% of its legacy debt to the government to make it more attractive to investors. But bidders remain concerned about overstaffing and the ability to fire employees. Last year's sale effort failed when the sole bid of $36 million fell far short of a $305 million floor price. Interested parties walked away before bidding, partly because the government was not willing to give up 100% of the company, with bidders saying they did not want the government to remain involved. Since then, PIA has posted its first operating profit in 21 years, driven by cost-cutting reforms, after making cumulative losses of $2.5 billion. This success of the current process will depend on whether the government is willing to give up a 100% stake, industry insiders said. They added that a government decision this month to remove the requirement of paying sales tax upfront on the lease of new aircraft, which had been an impediment, will make the deal more attractive. PIA resumed flights to Europe in January after the European Union lifted a four-year safety ban. The airline has also approached UK authorities for permission to resume services to London and Manchester. The restoration of international routes is vital to future growth opportunities and successful bidders are likely to bring in foreign airlines as operators. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
