Islamabad – In a historic development in the economy of Pakistan, the national flag carrier will have a new beginning after the successful PIA Privatization Auction on Tuesday.
The Arif Habib consortium won the tender with an ultimate price of Rs135 billion, the first significant privatization attempt in the country in almost two decades.
It was a live broadcast process in which some of the largest business names in Pakistan participated, to be in a position of buying the airline and become successful once again.
Bidding started with three pre-qualified groups, namely, Lucky Cement, Airblue, and Arif Habib. Following a first round in which Airblue pulled out of the race, the race became very intense between the two remaining giants.
The top price was initially Rs115 billion, but a break in to discuss the government reference price of Rs125 billion led to a second open round.
This was the last phase of the PIA Privatization Auction when the prices soared up, and Arif Habib finally bid higher than the Lucky Cement offer of Rs134 billion by a billion more rupees.
Also See: Three Bids Submitted as PIA Privatization Enters Crucial Phase
Investing in People and Progress
Finance Minister Muhammad Aurangzeb was also present at the ceremony and was very optimistic about the future of the airline.
He mentioned that the presence of local investors taking the lead is a win to Pakistan because they are those experienced business leaders who have a sense of the market locally and the international potential of the carrier.
The main objective of the PIA Privatization Auction is the aim to eliminate the losses of money which have been experienced by the airline over the years and to rejoin the institution into the world of global aviation.
The government has designed the deal in the form of selling at least 75 percent shares, and the remaining 25 percent could be acquired by the winning bidder within 90 days. This flexibility is meant to spur huge investment in the fleet and infrastructure.
The officials noted that it was not only to sell an asset, but to identify a partner that could grow the existing fleet of 18 planes to 40 or more, so that the employees could be paid on time and engines managed.
Opening Doors for Future Investment
The Prime Minister advisor on Privatization, Muhammad Ali, praised all those participants whose involvement made the process to be competitive and transparent.
In his view, the successful completion of the PIA Privatization Auction will act as a pointer to other industries to show that Pakistan is not here to play but serious business and mass investment.
The government hopes that through debt reduction and sourcing new capital, the national airline will gain back the glorious days it had in the past decades.
