Latest news with #Rs85.03
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.
Express Tribune
24-04-2025
- Business
- Express Tribune
Govt tightens PIA bidding terms
Listen to article The government on Thursday tightened conditions for prospective buyers of Pakistan International Airlines (PIA) to attract only financially sound parties for the second privatisation bid and also barred provincial governments from participating in the bidding. The prospective bidders can show their interest in acquiring majority shares in PIA till June 3, said Muhammad Ali, Adviser to Prime Minister on Privatisation, while talking to journalists. He said that the government tightened the conditions by learning lessons from the last failed privatisation attempt. It also facilitated investors by allowing them to change the lead consortium member two weeks before the bidding date. The adviser shared details of the revised Expression of Interest (EOI) for selling 51% to 100% PIA shares along with management control. It hopes to strike a deal by the last quarter of this calendar year. The government has set the June 3 deadline for submitting documents by prospective buyers excluding the federal and provincial governments and their entities. However, the affiliates of federal and provincial governments that do not fall in the category of state-owned enterprises like the Fauji Foundation are eligible to participate in the bidding, said Privatisation Commission Secretary Usman Bajwa while responding to a question. Fauji Foundation's name is in circulation as one of the potential consortiums to bid for acquiring PIA. Muhammad Ali said that the government had allowed the replacement of lead consortium members at least 15 days prior to bidding, subject to compliance with the pre-qualification criteria and the Request for Statement of Qualification instructions. Usman Bajwa said that the minimum worth of the lead consortium member should be Rs8 billion and it would have to go through all the checks before being declared eligible to participate in the bid. The privatisation adviser said that the change in the lead consortium member would not affect the price as all those changes had to be approved and vetted much before the bidding date. The government attempted to privatise PIA last year but ended up with the sole bidder that too a real estate developer, which offered Rs10 billion against the minimum price of Rs85.03 billion. This raised questions about the qualification criteria. The government has exempted 18% GST on the purchase or lease of aircraft for PIA and the negative equity can also be adjusted in light of the feedback to be received from the parties, said Ali. The reference price would be better than the last price of Rs85.03 billion due to the improvement in balance sheet of the airline, opening of European routes and settlement of 18% GST, said the privatisation adviser. To a question, the Privatisation Commission secretary said that according to the approved accounts, the assets and liabilities' position of PIA was more or less the same. He said that the overall balance sheet of the airline had improved because of booking the deferred tax credit of Rs30 billion this year, which was also a reason for showing profits. "One of the factors of PIA profitability is the adjustment of past tax credits at the current value of Rs30 billion," said the privatisation secretary. PIA has started breathing but it still needs money to grow and expand the 15 operational aircraft fleet, said Usman Bajwa. The adviser clarified that no foreign government was interested in buying PIA at this stage and the government would conduct the international competitive bidding. Ali said that financial soundness conditions had been made stringent to make sure that only financially credible companies come forward. The prospective buyer could be a scheduled airline. In case of non-airline business bids for PIA, such enterprise must have a minimum annual revenue of Rs200 billion, or $715 million, as per the audited financials of December 2023 or later. The minimum annual revenue of Rs100 billion, or $360 million, for each year during the last three years is also required, said the adviser. Ali said that there was a new insertion in the financial criteria for qualification related to liquidity and cash in hand. The party must have Rs28 billion, or $100 million, in cash or liquid assets, said the adviser. According to another improved condition, the prospective buyer must be audited by an international renowned firm of chartered accountants or category 'A' or 'B' list of auditors as per SBP's panel of auditors.
Business Recorder
24-04-2025
- Business
- Business Recorder
PIA privatisation: govt restarts airline sale process with fresh EOI call
Pakistan government announced on Thursday that it was seeking fresh bids for the privatisation of the Pakistan International Airlines (PIA), marking a renewed effort to offload its stake in the national carrier. The Privatisation Commission (PC) invited expressions of interest (EOIs) through an advertisement from investors interested in acquiring a majority stake in the restructured airline. 'Interested parties that are companies, firms, body corporate or other legal entities should submit EOIs (as a single entity or as a consortium)………with non-refundable processing fee of $5,000 or Rs1,400,000. 'Where an interested party is submitting an EOI as a consortium, the processing fee is only required to be paid by one member of the consortium……The EOI must be available with the Privatisation Commission and the processing fee must be paid, on or before 16:00 Hours, on Tuesday, June 3, 2025,' the advertisement read. 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. The PC board approved seeking new bids, the ministry said in a statement last week. 'The board approved the pre-qualification criteria for selection of prospective bidders,' it said then. The national carrier returned to profit after 21 years, posting a net profit of Rs26.2 billion for the year 2024. It recorded an operational profit of Rs9.3 billion for 2024, according to a PIA press release issued earlier this month. The last time the PIA posted a profit was in 2003 and later remained in loss for the next two decades. Passenger arrested for 'smoking, misbehaving with crew' during PIA flight to Paris PIA is a full service airline, providing aviation services supported by its ancillary segments. The business segments include passengers, ground handling, flight training, cargo engineering and flight kitchen. In the last financial year, the advertisement says, PIA served approximately 4 million passengers across 30 destinations, carrying out 268 flights per week. The Government of Pakistan (GOP) through PIA Holding Company Limited (PIA Holdco) owns approximately 96% of the issued capital of the PIA. PIA and PIA Holdco filed a scheme of arrangement with the Securities and Exchange Commission of Pakistan (SECP) under the Companies Act, 2017, which was sanctioned by the SECP through its order dated May 3, 2024 (SOA sanction order). Pursuant to the SOA Sanction Order, non-core assets and non-core liabilities were transferred to PIA Holdco (non-core business) and the PIA continues to hold the core assets and core liabilities (core business). The core business includes assets, liabilities, employees pertaining to air transport operations and allied services (including ground handling, flight training, cargo engineering and flight kitchen), rights and obligations under various operational agreements executed by the PIA including the air services agreements, code sharing agreements, fuel supply agreements and passenger sales agency agreements. Pursuant to the SOA sanction order, the shareholders of PIA became the shareholders of PIA Holdco and PIA became a wholly-owned subsidiary of PIA Holdco, with a single class of ordinary shares. PIA Holdco was listed on the stock exchange and PIA ceased to be listed.
