Govt Moves to Sell Entire PIA Stake
The federal government has decided to sell its entire stake in Pakistan International Airlines under a revised PIA privatisation plan aimed at attracting serious investors and reviving the loss-making national carrier.
Under the new structure, the government will auction 75 percent of PIA shares on December 23, while giving the successful bidder the option to acquire the remaining 25 percent later at a premium, according to officials familiar with the process.
The remaining shares can be purchased within one month at a price carrying a 12 percent premium over the original bid. The buyer will also be allowed to make the payment after one year instead of upfront, a move officials say is meant to ease investor financing.
The government has also relaxed payment terms. Only 7.5 percent of the bid amount will be paid in cash, while the remaining 92.5 percent will be injected directly into PIA as equity. In the previous privatisation attempt, bidders were required to deposit 15 percent in cash.
Officials said the decision to offer a full 100 percent sale was taken after shortlisted bidders demanded complete operational control, with no government involvement after the transaction. Earlier plans to sell a smaller stake failed to attract enough interest.
Adviser to the Prime Minister on Privatisation Muhammad Ali confirmed that bidders were seeking at least a 75 percent shareholding, while some demanded full ownership to ensure smooth decision-making. He said the government approved a green shoe option allowing the buyer to acquire the remaining shares at a later stage.
The government’s main objective, officials said, is to revive the airline rather than maximise short-term revenue through PIA privatisation.
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To improve the airline’s appeal, the government has already transferred Rs. 654 billion of PIA’s debt to a separate holding company, a liability now being serviced by taxpayers. In the current fiscal year, PIA is expected to receive Rs. 34.7 billion from the federal budget for debt servicing, pensions, and medical costs.
However, the new owners will still need to clear about Rs. 26 billion in outstanding taxes and airport-related dues, along with foreign liabilities such as aircraft lease payments. Privatisation Commission officials said PIA’s equity has turned positive and now stands at around Rs. 30 billion. They added that tax relief on aircraft leases and the restoration of international routes have strengthened the airline’s valuation.
Several major business groups are participating in the bidding process, including the Lucky Cement Consortium, Arif Habib Consortium, Fauji Fertilizer, and Air Blue.
