Pakistan moves ahead with PIA privatization as bids set for today

Pakistan’s Privatization Commission Board and the Senate Committee on Privatization will set the reference price for Pakistan International Airlines Corp. after receiving bids on Tuesday, officials said, as the government moves forward with the long-delayed sale of the national carrier.

The Privatization Commission said bidding will be held for up to a controlling stake in PIAC, with three companies participating in the process, fewer than the four originally expected.

Under the sale terms, the successful bidder will also acquire five overseas properties owned by PIAC in Germany, the Netherlands and India. Officials said the assets include offices and residential facilities used by airline staff.

Fauji Fertilizer Co. will not participate directly in the bidding but may later join the winning consortium, privatization officials said.

Authorities said all procedural and financial arrangements linked to the privatization have been completed and preparations are finalized.

To attract investors, the government has offered major concessions. The buyer will be exempt from paying sales tax on the purchase of new aircraft.

Unlike earlier privatization attempts, investors will not be required to assume PKR 33 billion in liabilities, officials said.

The buyer will also not be responsible for PKR 26.6 billion in outstanding dues to the Federal Board of Revenue or PKR 7 billion owed to Pakistan Aviation, according to officials.

The government plans to sell between 51% and 100% of PIAC shares. Officials said all liability-related issues were resolved before the bidding date.

Earlier efforts to privatize the airline were delayed after Pakistan failed to secure timely sales tax exemptions under its program with the International Monetary Fund.

Officials said the reopening of U.K. and European routes has since improved PIAC’s revenue outlook and is expected to support a stronger valuation.

Investors participating in the bidding are required to submit a bid bond of PKR 2 billion.

Following privatization, PIAC will require PKR 80 billion in immediate financing, officials said.

Bidding will be conducted for a 75% stake. Sealed bids will be submitted by 10:30 a.m. and opened publicly at 3:30 p.m. in the presence of bidders.

The reference price will be approved after bids are received, officials said.

Prime Minister’s Adviser on Privatization Muhammad Ali is scheduled to hold a news conference after the bidding process concludes.

Officials said the privatization is being carried out under Prime Minister Shehbaz Sharif’s economic reform agenda and will be broadcast live on television and official government social media platforms to ensure transparency.

The Privatization Commission said the sale is intended to revive the national carrier and restore it to its former standing.

Analysts said setting the reference price after bids signals flexibility by the government and may help address undervaluation concerns that affected earlier privatization attempts.

They said the cleanup of liabilities totaling more than PKR 66 billion materially improves the investment case for PIAC, while restored European and U.K. routes strengthen revenue prospects.

However, analysts noted that the reduction in bidders could limit competitive price discovery.

They added that the requirement for PKR 80 billion in post-sale financing highlights the scale of restructuring still required and said transparent execution could make the PIAC sale a test case for future state-owned enterprise reforms.