Latest news with #PrivatizationCommission
India.com
29-05-2025
- Business
- India.com
More bad news for bankrupt Pakistan, Shehbaz govt decides to sell one of country's biggest company, the company is...
More bad news for bankrupt Pakistan, Shehbaz govt decides to sell one of country's biggest company, the company is... After India's Operation Sindoor, Pakistan's condition seems to be worsening and now it's clearly visible too. One major sign of this is the upcoming sale of one of its biggest companies. The Pakistani government is preparing to sell its national airline, Pakistan International Airlines (PIA), to private players and reports say that they have already started inviting bids for it. Originally, the last date to submit bids was June 3, but it has now been extended to June 19. This move gives potential buyers more time to prepare their proposals to take over PIA. The government wants more people to participate in the bidding process, which is why they have given a 15-day extension. This sale is considered one of the biggest and most important privatization steps in Pakistan's recent history. Govt offering to sell between 51-100 per cent of its ownership A senior official from Pakistan's Privatization Commission confirmed to The News that the deadline for submitting bids has been extended, but all other terms and conditions for the sale remain unchanged. The government is offering to sell between 51 per cent and 100 per cent of its ownership in PIA, along with full management control. When asked why the deadline was extended, the official said it was because of the Eid-ul-Adha holiday. This move comes as part of the government's plan to reduce its fiscal deficit, fix loss-making state-owned enterprises, and attract foreign investment. The privatization of PIA is also part of the broader economic reforms agreed upon with the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) program. What was the plan earlier? To make the deal more attractive, the Pakistani government has introduced new incentives. These include GST (Goods and Services Tax) exemptions on new aircraft and removing PIA's loans from its balance sheet. The goal is to present potential buyers with a 'clean, zero-debt' balance sheet. A revised price benchmark for the deal may also be set soon. This new plan is much simpler and more straightforward compared to the previous failed attempt. Earlier, the government had offered 60 per cent of shares with an optional 15 per cent top-up. However, that plan failed mainly because of PIA's huge negative equity of 45 billion rupees and an 18 per cent GST on aircraft, which turned buyers away. EY Consulting LLC is advising the Privatization Commission on this sale. The government hopes to complete the process within this calendar year.
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.
