Latest news with #PIACL
Business Recorder
27-05-2025
- Business
- Business Recorder
PIA privatisation: govt extends deadline for bids to June 19
The government has extended the deadline to submit Expression of Interest (EoI) for buying Pakistan International Airlines Corporation Limited (PIACL) until June 19, 2025, from the earlier June 3 deadline, with all terms and conditions remaining the same. 'The deadline for submission of Expressions of Interest and Statements of Qualification for 'Divestment of Pakistan International Airlines Corporation Limited through privatisation' has been extended till 16:00 hours on Thursday, 19th June, 2025. The remaining terms and conditions shall remain the same,' read the advertisement. Pakistan International Airlines Corporation Limited (PIACL), a public limited company, is the flag carrier airline of Pakistan. The Government of Pakistan (GOP), through PIA Holding Company Limited, owns approximately 96% of the issued capital of PIA. PIA is a full-service airline, providing aviation services supported by its ancillary segments. In the last financial year, PIA served approximately 4 million passengers across 30 destinations, carrying out 268 flights per week. The government has been seeking to sell a 51-100% stake in the debt-ridden carrier to raise funds and reform cash-draining, state-owned enterprises (SOEs) as envisaged under a $7 billion International Monetary Fund programme (IMF). It failed in the first attempt to privatise the PIA last year after receiving a single offer, well below the asking price of more than $300 million. Blue World City consortium refused to match the minimum expectation of the Privatisation Commission of Rs85.03 billion and stuck to its original offer of Rs10 billion for a 60% stake in the PIA, ending the bidding process of the national flag carrier's privatisation.
Business Recorder
25-04-2025
- Business
- Business Recorder
Fresh criteria for pre-qualification: Govt aims to sell 51-100pc stake in PIA
ISLAMABAD: The federal government is hoping to offload 51 to 100 percent shares in Pakistan International Airlines Company Limited (PIACL) in fresh conditions for pre-qualification of bidding process expected to be concluded by next fiscal year. A fresh Expression of Interest (EoI) for the privatisation of PIA has been published with a submission deadline of June 3, 2025. This is the second EoI issued by the current government with assertion of new clauses. A non-refundable fee of Rs1.4 million is required with each application. The privatisation package includes all major business units—passenger services, ground handling, cargo, flight training, flight kitchen, and engineering. Key assets of the airline are also part of the offer. In a media briefing on Thursday, Adviser to the Prime Minister on Privatisation Muhammad Ali along with Secretary Privatisation Commission Usman Akhtar Bajwa shared the details of off load of PIA shares, DISCOs and Roosevelt Hotel. No provincial governments or state-owned entities (SOEs) are eligible to take part in PIA bidding process; however, responding to a question, Privatisation Commission Secretary Bajwa said that Fauji Foundation could take part in the bidding as it does not come under SOEs ambit. Responding to question regarding Rs29 billion profit earned by PIA, Muhammad Ali said the equity of PIA had been turned from negative to zero equity, however, PIACL is not a listed company; therefore profit of PIA would be shared after the audit of its accounts. New reference price and size of shares to be off loaded will be determined by Cabinet Committee on Privatisation (CCoP) in light of transaction structure of the entity. New criteria for pre-qualifications of PIA privatisation: Applicant could be scheduled airline. For non-airlines business, management and operation of a non-airline enterprise(s) for last 10 years with minimum annual revenues of PKR 200 billion or USD 715 million as evidenced by audited financials of December 2023 or later; and minimum annual revenue of Rs100 billion or USD 360 million for each year during the last three years. Applicant shall have (either applicant or consortium, the consortium members (in aggregate) shall have), Rs28 billion or USD 100,000,000 in cash or liquid assets. Applicant has a net worth of at least Rs30 billion or $110,000,000 and if the applicant is a consortium, that the consortium members have an aggregate net worth of at least Rs30 billion or $110,000,000 and the lead consortium member has a net worth of at least Rs8 billion or $ 29 million. Accounts of applicants to be audited by international renowned firm of chartered accountants or Category 'A' or 'B' list of auditors as per SBP's panel of auditors maintained under Section 35(1) of Banking Companies Ordinance, 1962 (as amended from time to time). The bank credit reference should include details of the credit lines acquired from the bank, a confirmation that the Applicant (and in the case of a Consortium, each Consortium Member) has consistently paid outstanding bank liabilities in a timely manner, and a verification of the latest Credit Information Bureau (ECIB) status, affirming that the Applicant (and in the case of a Consortium, each Consortium Member) has no history of default or relevant information in case of any default, during the last 10 years. Allowed to be replacement of the lead consortium members at least 15 days prior to bidding, subject to compliance to the requirements of the pre-qualification criteria and RSOQ instructions. The government has already announced a range of incentives which include exemption from the 18 percent general sales tax (GST) on the purchase or lease of new aircraft. Additionally, protection and coverage will be provided in certain tax and legal cases. The move also involves the transfer of specific liabilities listed on PIA's balance sheet, aimed at making the offer more attractive to potential buyers. The 19-story Roosevelt Hotel, located in midtown Manhattan, has been closed since 2020 and is owned by the Roosevelt Hotel Corporation, a subsidiary of PIA. Secretary Privatisation Commission said that the CCoP had directed the PC Board to come up with priority option out of three considered by the forum. The joint venture (JV) with multiple options would be taken at the level of board, he added. The proposed transaction structure for the long-pending divestment of the Roosevelt Hotel, shifting its focus from leasing options to either an outright sale or a JV. The privatisation of DISCOs, it has been said that Power Division will complete its preparations for the privatisation of three power distribution companies (DISCOs) — Hesco, Pesco, and Fesco — and financial adviser would be hired by July 2025. Copyright Business Recorder, 2025
Express Tribune
18-04-2025
- Business
- Express Tribune
PIA privatisation: fresh bid process approved
The Privatisation Commission is likely to publish a fresh advertisement next week for the divestment of 51 to 100 per cent shares of Pakistan International Airlines Corporation Limited (PIACL). A meeting of the Privatisation Commission Board was held on Thursday, chaired by Commission chairman Muhammad Ali. During the meeting, the board approved the eligibility criteria for interested bidders. In its previous session, the board recommended to the Cabinet Committee on Privatization (CCOP) a transaction structure for the second attempt to privatize PIACL. The structure is based on the sale of 51% to 100% PIACL's share capital, along with management control. The final terms and conditions for the transfer and acquisition of equity stake shall be finalised during the bidding process and included in the bid documents for CCOP's approval. Earlier this month, the country's defence minister announced that the national flag carrier had posted an annual profit for the first time in over two decades, ahead of the government's renewed efforts to privatise the airline. The disclosure was made at a PIA board meeting, the minister said. "PIACL Board today has approved its accounts FY 2024, and after 21 years, it has achieved an operating profit of Rs9.3 billion ($33.14 million) & Net Profit of Rs26.2 billion (after deferred tax adjustment)," Defence and Aviation Minister Khawaja Muhammad Asif said in a post on X, which was confirmed by the airline in a statement. (With input from Reuters)
Arab News
09-04-2025
- Business
- Arab News
Pakistan mulls transaction structure for second attempt to privatize loss-making national airline
ISLAMABAD: Pakistan is mulling transaction structure for a second attempt to sale 51-100 percent share of its loss-making national carrier, the Pakistan International Airlines (PIA), the Privatization Commission said on Tuesday. Cash-strapped Pakistan is looking to privatize the debt-ridden PIA to raise funds and reform state-owned enterprises as envisaged under a $7 billion International Monetary Fund (IMF) program secured last year. Late last year, a deal fell through after a potential buyer reportedly offered $36 million for a 60 percent stake in the national flag carrier, a fraction of the asking price of approximately $303 million. On Tuesday, Muhammad Ali, Pakistan prime minister adviser on privatization, presided over the commission's board meeting to discuss transaction structure for the divestment of the Pakistan International Airlines Corporation Limited (PIACL). 'The board recommended to CCOP (Competition Commission of Pakistan) the transaction structure proposed for the 2nd attempt of PIACL privatization based on divestment of 51 percent to 100 percent share capital of PIACL together with the management control of PIACL,' the Privatization Commission said. 'The final terms and conditions for the transfer and acquisition of equity stake shall be finalized during course of bidding process and set out in the bid documents for approval by CCOP.' In June, the government had pre-qualified six groups, but only real-estate development company Blue World City participated in the bidding process to acquire the airline. Among concerns raised by potential bidders for the PIA stake include policy continuity, honoring contracts, inconsistent government communication, unattractive terms and taxes on the sector, and the flag carrier's legacy issues and reputation. Officials say PIA's cumulative losses alone are close to $3 billion, with the total asset valuation of the airline standing at approximately $572 million. Earlier this year, PIA resumed operations in Europe, after a 2020 ban by the European Union Aviation Safety Agency (EASA) over concerns about the ability of Pakistani authorities and its Civil Aviation Authority (PCAA) to ensure compliance with international aviation standards. EASA and UK authorities both suspended permission for PIA to operate in the region after Pakistan began investigating the validity of pilots' licenses following a deadly plane crash that killed 97 people. Pakistan hopes new European routes and flying approval to the UK will boost PIA's selling potential.
