ISLAMABAD: The bidding of loss-making Pakistan International Airlines Corporation Ltd (PIACL), the first state-owned entity in line for divestment has been scheduled to be held on Thursday (October 31) at a local hotel.
Earlier, the bidding process scheduled to be held on October 1 was postponed and moved to October 31 as the bidders requested additional time.
The government is resolute in not granting 100 percent shares to the bidding companies.
Initially, the discussions focused on offering 60 percent shares, which has now shifted to 75 percent. The intention is to secure agreement from the companies on the 75 percent share offer.
The Privatisation Commission prequalified six bidders - Fly Jinnah, a consortium led by YB Holdings (Pvt) Ltd, Airblue Ltd, a consortium led by Pak Ethanol (Pvt) Ltd, Arif Habib Corporation Ltd and Blue World City.
The commission board, chaired by Privatisation Minister Abdul Aleem Khan, considered the recommendation concerning the permitted changes under the terms of the “Request for Statement of Qualification (RSOQ)”.
The reserve/floor price has been finalised and approved by the federal cabinet before the bidding. The cabinet already finalised the percentage of the bid be paid to the government and percentage invested back in PIACL as a rights issue.
Issues like successful bidders’ investment in PIA to lift the airlines to the level of regular operating airlines and the current ban on PIA operations in Europe are some concerns of potential bidders which have been addressed.
The successful bidder will be required to invest between Rs65 to 70 billion and increase PIA’s fleet from 18 to 45 aircraft within a span of three years. The secretary further clarified that while the PIA’s existing staff will be retained for two to three years, any changes to the airline’s routes will necessitate government’s approval.
The PIACL incurred a loss of Rs75 billion during 2023 while its liabilities increased to Rs825 billion, with total assets amounting to Rs161 billion.
Copyright Business Recorder, 2024
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