PIA Privatization Attracts Multiple Bidders

As the Pakistani government moves forward with a renewed effort to privatize Pakistan International Airlines (PIA), several entities have expressed interest. Fauji Fertilizer, Air Blue, and three consortiums have formally submitted Statements of Qualification (SOQs), signaling their intent to potentially acquire a stake in the national carrier.

This development occurred as the deadline for submitting SOQs, which pertain to acquiring a 51% to 100% share capital stake in Pakistan International Airlines Corporation Limited (PIACL), concluded on Thursday.

The Privatisation Commission (PC) initially received Expressions of Interest (EOI) from eight parties. Ultimately, five of these parties submitted SOQs before the specified deadline.

The five interested parties include:

  • Fauji Fertilizer
  • Air Blue
  • Three consortiums

The Privatisation Commission stated that the submitted SOQs will undergo evaluation against prequalification criteria. Successful parties will then advance to the next phase, gaining access to a virtual data room to conduct in-depth due diligence.

The government relaunched the PIA sale process in April of this year with a fresh EOI call, marking a renewed push to divest its stake in the national carrier. The initial deadline for EOI submission was June 3, which was subsequently extended to June 19, with all original terms and conditions remaining in effect.

The government aims to sell a 51-100% stake in the heavily indebted carrier to generate revenue and implement reforms in cash-draining, state-owned enterprises (SOEs). This strategy aligns with the objectives outlined in a $7 billion International Monetary Fund (IMF) program.

An earlier attempt to privatize PIA failed last year due to receiving only one offer, which was substantially below the asking price of over $300 million.

The Blue World City consortium declined to meet the Privatisation Commission’s minimum expectation of Rs85.03 billion, holding firm to its initial offer of Rs10 billion for a 60% stake in PIA. This effectively ended the bidding process for the national flag carrier’s privatization.

The government is projected to miss its modest target of collecting Rs30 billion in privatization proceeds for the current financial year 2024-25, amid plans to privatize several entities.