ISLAMABAD: The Arif Habib Corporation Limited–led consortium acquired a majority stake in Pakistan International Airlines (PIA) with the highest bid of Rs135 billion for the privatisation process of the national flag carrier.
Arif Habib raised its bid from Rs135 billion to Rs121 billion after the Lucky Cement Limited–led consortium increased its earlier bid of Rs101.5 billion to Rs134 billion in the second round of the open-bidding.
The first round saw a Privatisation Commission official opening the bids in the country’s second televised attempt to privatise the national airliner.
Meanwhile, Finance Minister Muhammad Aurangzeb said that whoever succeeds in the bidding process for the national airline, the victory would ultimately belong to Pakistan.
Addressing the ceremony, the finance minister noted that all bidders participating in the privatisation process were Pakistani, calling it a “major and encouraging development” for the country’s investment climate.
“All the bidders today are from Pakistan, which is a huge thing. The best and biggest business groups are competing for the national airline, and the airline will be led by large, seasoned Pakistani investors,” Aurangzeb said.
He added that the bidding process would help promote foreign investment indirectly by strengthening investor confidence and demonstrating Pakistan’s commitment to transparent economic reforms.
The finance minister said the government wanted state-owned institutions to stand on their own feet and described the participation of domestic investors as a positive sign for the economy.
Aurangzeb also congratulated Adviser to the Prime Minister on Privatisation Muhammad Ali and his team for conducting what he termed a professional and credible process.
“I congratulate Muhammad Ali and his team for running a process that only professionals like yourselves can deliver,” he said.
‘Majority of bid amount for improving PIA’
Speaking before the open bidding, Ali said that privatisation of the national flag carrier was part of the government’s reform agenda.
“Government’s aim is not to sell the national airline but to make it stand on its own feet,” he added.
Ali said that the privatisation of PIA will bring investment to the country, adding that the government wanted to revive the past glory of the airline.
He said the government had decided to privatise between 51% and 100% of the national airline’s shares, adding that some bidders had expressed interest in acquiring a 75% stake.
Ali said the government ultimately decided to sell 75% shareholding in the airline. He stated that 92.5% of the amount generated through the bidding process would be spent on improving the national airline, while the remaining portion would go to the government.
He further explained that bidders would be allowed to make payments in phases, with two-thirds of the amount payable upfront and the remaining one-third at a later stage.
The adviser added that bidders have also been permitted to include up to two additional parties after the bidding process is completed.
The first round of open-bidding ceremony for the privatisation of Pakistan International Airlines (PIA) held in Islamabad, with three bidders in the race to acquire a majority stake in the national flag carrier.
As two bids exceeded the government’s reference price of Rs100 billion, the successful bidder will now be determined through an open auction.
The subsequent round will give the lower-priced bidder the opportunity to match or raise their offer above the highest bid.
The bidders included a consortium led by Lucky Cement Limited, comprising power producer Hub Power Holdings Limited, Kohat Cement Company Limited KOHC, and investment firm Metro Ventures.
A second consortium was led by Arif Habib Corporation Limited, comprising fertiliser maker Fatima Fertiliser Company Limited, private school network City Schools and real estate firm Lake City Holdings Limited. The third bidder was private airline Air Blue (Private) Ltd.
The auction is Pakistan’s second televised attempt at selling the once storied flag carrier after a bungled process last year drew only a solitary bid that fell far below the government’s reference price, derailing what would have been Pakistan’s first major privatisation in nearly two decades.
The bids opened in a ceremony starting at 4:30 pm in the presence of the bidders.
Representatives of the bidding groups walked in one by one on Tuesday to deposit sealed offers into a transparent box during the live broadcast, briefly fumbling as they pushed envelopes through the slot in a public ceremony broadcast on state television.
Bids for a majority stake in PIA are scheduled in two phases. A second open-bidding ceremony is set for later in the day, officials said.
“I am thankful to the ministers and head of the Privatisation Commission for making the process transparent,” Prime Minister Shehbaz Sharif said, calling on cabinet members to attend the second ceremony.
