Pakistan officials meet representatives of business houses for PIA sale
During the meetings, the officials showed presentations sharing that several hinderances earlier raised by potential buyers have been removed
View of a Pakistan International Airlines (PIA) passengers plane, taken through a glass panel, at the Allama Iqbal International Airpor tin Lahore, Pakistan January 29, 2024.
Pakistan government officials have met representatives of eight business houses to discuss the privatisation of Pakistan International Airlines (PIA) in a bid to fulfil one of the key requirements of the $7 billion International Monetary Fund (IMF) loan program.
Sources at the Ministry of Finance revealed officials of the Privatisation Commission met the representatives of eight business houses — Mansha Group, Fatima Group, Gohar Ejaz Group, Sapphire Group, Arif Habib Group, Tabba Group, Habibullah Khan Group and Equitas Group.
During the meetings, the officials showed presentations sharing that several hinderances earlier raised by potential buyers have been removed.
To make the latest privatization bid successful, the government has offered new incentives, including GST exemptions on new aircraft and shifting PIA's debt off its balance sheet. These changes aim to present PIA with a “net-zero balance sheet” to potential buyers.
A revised price benchmark for the deal may also be set soon.
The current plan offers a simplified and cleaner transaction compared to an earlier failed attempt, which offered 60% of shares with an optional 15% top-up. Back then, PIA's negative equity of PKR 45 billion and 18% GST on aircraft were key roadblocks.
Last week, the Pakistan government extended the date for submitting expressions of interest (EOIs) for buying majority stakes in the national flag carrier till June 19.
Sources told Nukta that the Privatization Commission extended the deadline from June 3 due to Eidul Adha festivities and requests from potential bidders for more time to study the PIA's finances.
The privatization of and reduction in losses of state-run companies has been the one of the key conditions of the International Monetary Fund under the $7 billion loan program.
Last month, a PIA spokesperson said that the carrier’s board of directors approved its financial results for 2024, which showed the airline achieving a net profit after around 21 years.
According to the results for FY24, PIA earned an operational profit of PKR 3 .9 billion and a net profit of PKR 2.26 billion.
The airline's operating margin was more than 12% which is on a par with the performance of any of the best airlines in the world, the spokesperson said.
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