The federal government has moved ahead with plans to sell its entire 100% stake in Pakistan International Airlines (PIA), with an option for bidders to acquire the remaining 25% of shares at a 12% premium one year after the initial purchase, The Express Tribune reported.
The bidding process for 75% of PIA’s shares will take place on December 23, with an offer for the winning bidder to buy the additional 25% within a month.
Under the new terms, the winning bidder will pay only 7.5% of the bid amount in cash, with the remaining 92.5% to be reinvested directly into the airline for its revival.
The decision marks a shift from previous attempts, where the government offered only a 60% stake, but failed to attract serious interest. This time, the sale offers a green shoe option for bidders, providing them the chance to acquire additional shares at a post-money valuation with the 12% premium.
The government’s main objective is to revive PIA, which has suffered years of mismanagement. The large-scale investment is aimed at fleet revamping and acquiring new planes to put the airline back on a financially sustainable path.
To make the deal more attractive, the government has taken steps to improve PIA’s financial standing, including the removal of Rs654 billion in debt from the airline’s balance sheet and securing favourable tax waivers.
Privatisation Advisor Muhammad Ali confirmed that several major business groups, including the Lucky Cement Consortium, Arif Habib Consortium, Fauji Fertiliser, and Air Blue, are among the bidders.
The government has also provided additional support to improve PIA’s net equity position and indemnify against certain liabilities, but bidders will be required to exercise patience before receiving any dividends.
With PIA’s fleet currently consisting of 34 aircraft, only 18 of which are airworthy, the airline’s biggest assets remain its air service agreements with 97 countries and more than 170 paired landing slots worldwide. These assets, especially sought-after slots like those at London Heathrow, are expected to play a crucial role in attracting a better sale price.
The bidding process, while offering significant investment potential, also signals the government’s commitment to revitalizing PIA, but the new owners will need to commit substantial resources for its long-term recovery.
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