Pakistan seeks to restart the privatization process of PIA
Pakistan plans to seek fresh bids
for the sale of Pakistan International Airlines (PIA) later this month,
according to a government adviser, following PIA's first annual profit in over
two decades.
The government is aiming to offload
a 51-100% stake in the debt-ridden airline as part of a broader initiative to
raise funds and reform state-owned enterprises, a key aspect of a $7 billion
program with the International Monetary Fund (IMF).
Pakistan's previous attempt to
privatize PIA last year failed, receiving only a single bid that was
significantly lower than the asking price of over $300 million.
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In an effort to address issues that
led to the failed privatization attempt, Pakistan has shifted almost all of
PIA's legacy debt to government books. According to the privatisation ministry,
these steps were taken to resolve concerns raised by bidders about taxation and
the airline's financials.
Muhammad Ali, the government adviser
on privatisation, told Reuters, “In our last attempt to privatize PIA,
pre-qualified bidders had some issues with taxation and the balance sheet.
Those issues are now resolved.” He added, “We plan to publish the new
Expression of Interest (EoI) by the last week of April 2025.”
The government aims to finalize the
airline’s privatization by the end of this year. Ali also mentioned that the
government is revising the pre-qualification criteria and could adjust the
reference price in light of the latest financials.
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Prime Minister Shehbaz Sharif had
announced last year plans to privatize all state-owned enterprises (SOEs). The
adviser further noted that efforts to privatize power distribution companies
had begun, labeling it a "high-priority transaction."
Additionally, the government has
enlisted Jones Lang LaSalle to explore options for selling the PIA-owned
Roosevelt Hotel building in Manhattan, New York, either as a standalone sale or
through a joint venture with a top-tier developer, which could potentially
yield five times higher proceeds.
Source: Zawya