ISLAMABAD (Kashmir English): With a highest bid of Rs135 billion, the Arif Habib consortium won an open auction round to acquire 75 per cent shares in Pakistan International Airlines Corporation Ltd (PIAC), completing the country’s major privatisation.
Three bids, submitted today for PIA privatisation, came from pre-qualified bidders Lucky Cement, private airline Airblue, and investment firm Arif Habib.
In the first round for the Rs100 billion reference price, Arif Habib Corporation Limited placed the highest bid of Rs115 billion, while the Lucky Cement consortium put up a Rs 101.5 billion bid, and Airblue bid Rs 26.5 billion.
In the first round with the Rs 100 billion reference price, Arif Habib Corporation Limited placed the highest bid of Rs 115 billion, while the Lucky Cement consortium put up a Rs 101.5 billion bid, and Airblue bid Rs 26.5 billion.
After the first round, two out of three qualified parties qualified for the next round as they submitted the bid above the minimum expected price.
In the second round, the base bid was set at Rs115bn, with the minimum increment was at Rs250 million. Both bidders engaged in a brief competition to outbid each other during the round.
However, when Lucky Cement raised its bid to Rs134bn, Arif Habib countered with Rs135bn, forcing Lucky Cement to bow out and congratulate Arif Habib.
As per the details, the government will get Rs 10.12 billion in cash out of the final bidding prices, while the rest of the 92.5% of the amount will be invested directly in the PIA.
The government-retained 25% stake has been termed a valuable asset, and successful bidders will have the option to acquire it at a later stage or allow it to remain with the state, according to the privatisation framework.
Earlier, while speaking at the bidding ceremony, Finance Minister Muhammad Aurangzeb thanked the PM‘s aide and his team for their efforts and hailed the bidding process in terms of transparency.
“All the bidders today are from Pakistan, which is a significant milestone. The country’s largest and most seasoned business groups are competing for the national airline, which will be led by experienced Pakistani investors,” Aurangzeb said.
He lauded Pakistan‘s biggest conglomerates for “vying for the best airline” and said that the flag carrier would be led by investors and some of Pakistan’s most experienced businesspeople.
“The fact that they have stepped up is a doubtless sign that anyone who is the successful bidder will take it not only to where we were, but where we need to be in the comity of nations,” Aurangzeb added.
Furthermore, the government has assured 12 months of job security for PIA employees. Pension liabilities, medical benefits, and other post-retirement perks will be handled by the holding company, while current salaries and benefits will be paid by the new owners.
PIA currently has rights to 78 destinations and holds about 170 landing slots worldwide. Officials said the airline urgently needs fresh investment and professional management to turn around its operations.
