Government to Seek Expressions of Interest for PIA Sale Next Week

The Ministry of Privatisation announced on Thursday that the government intends to solicit expressions of interest for the sale of Pakistan International Airlines (PIA) in the coming week. This announcement follows the national flag carrier’s recent report of its first annual profit in over twenty years.

In line with a $7 billion International Monetary Fund program, authorities are aiming to divest a 51-100% stake in the heavily indebted airline. The goal is to generate revenue and restructure financially strained state-owned enterprises.

An earlier attempt to privatize PIA last year only attracted a single bid, which was substantially below the asking price of over $300 million.

The Privatisation Commission board has given the green light to seek fresh bids, according to a ministry statement.

“The board sanctioned the pre-qualification criteria for the selection of potential bidders,” the statement noted, adding that new expressions of interest for acquiring between 51 and 100% of the airline would be requested next week.

Pakistan has transferred nearly all of the national carrier’s historical debt to government accounts. This move addresses concerns raised by bidders that contributed to the failure of the previous privatization effort.

Muhammad Ali, the advisor on privatisation, stated last week that all issues identified during last year’s unsuccessful attempt have been resolved.

The government is aiming to conclude the airline’s privatization before the close of this year.

Prime Minister Shehbaz Sharif announced last year the intention to sell all state-owned enterprises (SOEs).

In his statement last week, the advisor also mentioned that the privatization process for power distribution companies has commenced, describing it as a “high priority transaction”.

He further added that certain companies initially slated for sale in the second phase are being moved to the first phase.

The government has engaged Jones Lang LaSalle to provide advisory services on exploring various sales strategies for the PIA-owned Roosevelt hotel in Manhattan, New York. These options encompass either selling the building outright or pursuing a joint venture with a leading developer, which, according to Ali, could potentially generate five times more revenue.