Pakistan invites fresh expressions of interest (EOIs) PIA privatization
The government of Pakistan has
formally restarted the privatization process of Pakistan International Airlines
(PIA), inviting fresh expressions of interest (EOIs) from potential investors
after a failed auction last year. This renewed effort aims to offload a
controlling stake—ranging from 51% to 100%—in the overhauled national carrier
as part of broader economic reforms under the country’s ongoing $7 billion IMF
loan program.
In a public announcement on
Thursday, the Privatization Commission called for EOIs to be submitted by 4:00
pm on Tuesday, June 3, 2025, accompanied by a non-refundable fee of $5,000 or
Rs1.4 million. For consortiums, only one member is required to pay the fee.
Eligible bidders include companies, legal entities, or groups meeting financial
and technical pre-qualification criteria.
Read More Privatizations of flag carriers in subcontinent: Challenges and Opportunities
The sale is a central element of
Pakistan’s commitment to reform loss-making state-owned enterprises (SOEs) and
reduce fiscal drain. The previous bidding process in 2024 failed after
attracting only one offer—Rs10 billion for a 60% stake—from the Blue World City
consortium. The bid fell far short of the government’s valuation of Rs85.03
billion and was ultimately rejected due to concerns over pricing, transparency,
and investor confidence.
In response, authorities initiated a
sweeping corporate restructuring of the airline to enhance its investment
appeal. On May 3, 2024, the Securities and Exchange Commission of Pakistan
(SECP) approved a scheme of arrangement (SOA) that divided the airline into two
distinct entities: PIA and PIA Holding Company Limited (PIA Holdco).
Under the new structure:
- PIA
retains the core airline operations, including passenger services, cargo,
ground handling, engineering, flight training, and catering.
- PIA Holdco
absorbs legacy liabilities, including accumulated debt and non-core
assets, and now functions as the parent company listed on the stock
exchange.
The restructuring has already
started paying off. PIA reported its first annual profit in over two decades,
posting net earnings of Rs26.2 billion and an operating profit of Rs9.3 billion
for 2024. The last profitable year was 2003, with subsequent years marred by
chronic losses due to mismanagement and political interference.
Read More Govt rehires Ernst & Young (E&Y) for PIA privatization effort
In terms of operations, the airline
has shown signs of stability. Over the past year, it transported approximately
4 million passengers across 30 destinations, operating an average of 268
flights per week. PIA continues to function as a full-service airline with
vertically integrated support services.
The Privatization Commission has
also revised its pre-qualification benchmarks to ensure that only financially
robust and technically capable bidders are shortlisted—aiming to avoid a repeat
of the 2024 misstep.
With this new structure and a
clearer roadmap, the government is aiming to complete the transaction within
2025, bringing to a close a privatization saga that has stretched for nearly 20
years and helping fulfill crucial IMF-mandated reforms.
Source: Profit Pakistan