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 more than twenty years.

In line with a $7 billion program supported by the International Monetary Fund, authorities are aiming to divest between 51% and 100% of the financially burdened airline. The goal is to generate revenue and implement reforms in state-owned enterprises that are draining the country’s resources.

An earlier effort to privatize PIA last year attracted only a single bid, which was significantly below the asking price exceeding $300 million.

According to a statement from the ministry, the Privatisation Commission board has granted approval to seek fresh bids.

“The board has sanctioned the pre-qualification standards for identifying potential bidders,” the statement noted, adding that new expressions of interest for acquiring a 51% to 100% stake in the airline will be requested next week.

After previous bidder concerns led to the failure of the last privatization attempt, Pakistan has transferred the majority of the national carrier’s historical debt to government accounts.

Muhammad Ali, the advisor on privatization, stated last week that all the issues raised during the previous failed attempt have been addressed.

The government is aiming to finalize the airline’s privatization before the close of the current year.

Prime Minister Shehbaz Sharif declared the intention to sell all State-Owned Enterprises (SOEs) last year.

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

He further indicated that several companies initially planned for sale in the second phase are now being prioritized for the initial phase.

The government has enlisted Jones Lang LaSalle to provide guidance on exploring various sale options for the PIA-owned Roosevelt hotel building in Manhattan, New York, according to the advisor.

These options encompass the outright sale of the building or entering into a joint venture with a leading developer, which, according to Ali, has the potential to yield returns five times greater.