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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
10-04-2025
- Business
- Arab News
CEO says PIA's first annual profit in decades to attract ‘favorable valuation' from investors
KARACHI: Pakistan International Airlines expects to attract 'more favorable valuation' from investors after the national carrier posted an annual profit for the first time in more than two decades ahead of a second attempt by the government to sell the airline, CEO Amir Hayat said this week. Islamabad's attempt to privatize PIA last year fell flat when it received only a single offer, well below the asking price of more than $300 million. The cash-strapped government of Prime Minister Shehbaz Sharif is struggling to privatize several loss-making public enterprises, including PIA, as part of conditions under a $7 billion International Monetary Fund's loan program approved last year. This week, PIA reported Rs9.2 billion ($33.1 million) earnings from its operations last year ended December and made a net profit of Rs26.2 billion ($93.3 million) in 2024, a development described by analysts as 'good optics' for the privatization push. 'This landmark operational profit of 26 billion rupees fundamentally strengthens PIA's position in the context of the government's privatization plan,' Hayat told Arab News in a written response to questions. 'It demonstrates the inherent value and turnaround potential of the airline, making it a significantly more attractive proposition for potential investors.' He said the results would positively influence investor confidence and potentially lead to a 'more favorable valuation' during the privatization process. Pakistan had offloaded nearly 80 percent of the airline's legacy debt and shifted it to government books ahead of the privatization attempt. The rest of the debt was also cleaned out of the airline's accounts after the failed sale attempt to make it more attractive to potential buyers, according to the country's privatization ministry. The airline has for years survived on government bailouts as its operational earnings were eaten up by debt servicing costs. Officials say offloading the debt burden and recent reforms like shedding staff, exiting unprofitable routes and other cost-cutting measures led to the profitable year. Hayat said the latest profit was because of 'a comprehensive reforms program' executed over the past few years. 'Key drivers include maintaining strict financial discipline by implementing stringent cost control measures across the board, scrutinizing every expense, creating operational efficiencies in every aspect of flight operations, reducing ground times, and enhancing fuel efficiency,' Hayat said. Other measures included route optimization by curtailing non-productive routes and capitalizing on profitable ones, and revenue enhancement by creating opportunities in neglected segments such as cargo, ancillary sales and codeshares and alliance partnerships. 'We view this profit not as a one-off anomaly, but as the foundational result of deep, structural changes within the airline,' Hayat added. While the aviation industry remained vulnerable to external variables like fuel prices and geopolitical factors, PIA had developed internal mechanisms that provided a 'strong basis for continued positive performance.' 'Our clear intent and strategy are geared toward maintaining profitability moving forward and our budget for 2025 is already planned on net profitability,' the PIA CEO said. Muhammed Sohail, the chief executive officer at Topline Securities, said the latest profits would provide 'good optics to attract more investors' to buy the airline. Ahead of the attempt to sell the airline last year, PIA had faced threats of being shut down, with planes impounded at international airports over its failure to pay bills and flights canceled due to a shortage of funds to pay for fuel or spare parts.
Arab News
07-03-2025
- Business
- Arab News
Pakistan stocks surge by over 1,400 points amid decline in oil prices, policy rate cut hopes
ISLAMABAD: The Pakistan Stock Exchange (PSX) surged by over 1,400 points on Thursday as bulls dominated the trading session, with analysts attributing the rise to a drop in oil prices at the international market and investors' hopes of a further cut in the policy rate by the central bank. The benchmark KSE-100 index rose by 1,459.41 points or 1.3 percent to close at 113,713.17 points on Thursday, up from the previous close of 112,253.76. The development takes place as the State Bank of Pakistan's (SBP) Monetary Policy Committee (MPC) is set to review the interest rate on Mar. 10, with many expecting the bank to slash the interest rate further. 'Stocks closed bullish led by scrips across the board amid speculations ahead of SBP policy announcement on March 10,' Ahsan Mehanti, managing director and CEO of Arif Habib Commodities, told Arab News. It said investors' expectations for further ease in the central bank's policy after treasury bill auction yields remained flat, following a decade-low consumer price index inflation which was recorded at 1.5 percent year-on-year in February. Prominent Pakistani brokerage house Topline Securities attributed the surge in stocks to a sharp decline in global oil prices. 'This rally was primarily driven by a sharp decline in international oil prices, which plunged to multi-year lows, uplifting investor sentiment,' Topline Securities said in its daily market review. 'Moreover, speculation surrounding high-level meeting on the clearance of the longstanding circular debt further fueled optimism across the board.' The report highlighted how the benchmark index surged to an intraday high of 1,617 points causing the equity market to witness a robust rebound in today's session. It added that a total of 372 million shares changed hands which generated a turnover of Rs26.2 billion with PIBTL dominating the volume charts. The development takes place as an International Monetary Fund (IMF) team is in the country for the first review of the $7 billion loan program that Islamabad secured last September. A nine-member mission, led by IMF Mission Chief in Pakistan Nathan Porter, is in the country to assess Pakistan's economic performance and determine the release of a $1.1 billion tranche from the $7 billion Extended Fund Facility (EFF) over the next three weeks, secured as part of Islamabad's economic recovery plan.
