Pakistan to complete pre-qualification process for PIA sell-off next week
Due diligence process to begin early next month, say sources
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
Reuters/File
Pakistan is set to complete the pre-qualification process for the sell-off of its national flag carrier — the Pakistan International Airlines (PIA) — next week while bidding will be opened before the year's end, sources in the Privatization Commission informed Nukta.
They added that the due diligence, which refers to the Privatization Commission finalizing the bidders who would then be allowed to evaluate the PIA's books to gauge its assets and liabilities, would begin early next month.
Following the completion of the due diligence process, the interested entities would be invited to submit their bids.
The sale is seen as a test of Pakistan's ability to shed loss-making state firms and meet conditions of a $7 billion International Monetary Fund package to boost the country's economy and strengthen its foreign exchange reserves. It would be the first major privatization in nearly two decades.
Eight parties submitted their expressions of interest, but only five of them provided documents of qualification, the Privatization Commission said in a statement last week.
Among the five is a consortium of major industrial firms: Lucky Cement Ltd, Hub Power Holdings Ltd, Kohat Cement Co Ltd and Metro Ventures.
Another is led by investment firm Arif Habib Corp Ltd and includes Fatima Fertilizer Co Ltd, The City School and Lake City Holdings.
Fauji Fertilizer Company Ltd, a military-owned conglomerate, Air Blue Ltd, and a consortium including Bahria Foundation, Serene Air and Equitas Capital LLC also submitted documents.
“The government will review the documents and give qualified parties access to data for due diligence,” the statement read.
The privatization process is moving forward with these bids, aiming to revitalize the struggling airline. The bids were submitted after the deadline was extended to June 19, indicating strong interest from well-established business groups in Pakistan.
The government is offering a 100% stake in PIA, with a significant portion of the airline's debt being offloaded. The goal is to transfer PIA to a consortium that can make it a profitable global player, an aviation expert said.
A previous attempt to sell the airline failed as a PKR 10 billion bid from real estate firm Blue World City fell short of the floor price of PKR 85 billion, with concerns over debt, staffing and limited control.
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