Pakistan received three bids on Tuesday in a nationally televised auction for its state-owned carrier, Pakistan International Airlines (PIA), as the government pressed ahead with a reform long sought by the International Monetary Fund (IMF).
This was the country’s second live auction of the troubled airline after last year’s attempt faltered. The 2024 process attracted only one bid that fell well below the government’s benchmark price, halting what was intended to be Pakistan’s first major privatisation in almost twenty years.
Transparent Bidding Ceremony
During Tuesday’s broadcast, representatives from the competing groups entered one after another to place sealed envelopes into a transparent box, momentarily fumbling as they inserted their bids during the televised ceremony. Officials said the auction would unfold in two stages, with the second round of open bidding set for later in the day.
Prime Minister Shehbaz Sharif praised the transparency of the process and urged cabinet members to attend the afternoon session. “I am thankful to the ministers and the head of the Privatisation Commission for ensuring a transparent procedure,” he said.
Competing Consortia and Private Airline
Among the three bidders was a consortium led by Lucky Cement Limited, which included Hub Power Holdings Limited, Kohat Cement Company Limited and investment firm Metro Ventures.
A second group was headed by Arif Habib Corporation Limited, featuring Fatima Fertiliser Company Limited, private education network City Schools and real estate developer Lake City Holdings Limited.
The third bidder was private airline Air Blue (Private) Limited.
Under the government’s structure, Pakistan is offering to sell up to 100% of PIA. Any stake above 75% would carry a 15% premium, according to local media reports.
Improved Financial Outlook
Last year, the government set a minimum price of 305 million dollars for a 60% stake but received only one bid worth 36 million dollars from Blue World City. The bidder refused to increase its offer, citing heavy losses and inefficiencies within PIA.
Since then, the government has absorbed most of PIA’s historic debt, allowing the airline to post its first pre-tax profit in twenty years. The United Kingdom and the European Union have also lifted a five-year ban that had cut PIA off from key routes, improving the carrier’s prospects and potential valuation.
IMF-Driven Privatisation Drive
The airline’s sale is part of a broader privatisation agenda tied to Pakistan’s IMF bailout package. The government aims to reduce fiscal losses and revive investor confidence by divesting stakes in several state-owned enterprises, including banks and power distribution companies.
Analysts believe that the reopening of European routes and reduced debt burden could significantly boost investor interest this time.
with inputs from Reuters
