Latest news with #UsmanAkhtarBajwa
Business Recorder
7 days ago
- Business
- Business Recorder
Revised business plan: PIA buyer required to invest Rs70bn in 5 years: PC
ISLAMABAD: Privatization Commission Secretary Usman Akhtar Bajwa, Tuesday, informed the Senate Standing Committee on Privatization that the buyer of Pakistan International Airlines Corporation Limited (PIACL) will be required to invest Rs70 billion over five years period under revised business plan of privatisation of PIA. A meeting of the Senate Standing Committee on Privatization was held under the chairmanship of Senator Dr Afnanullah Khan. The meeting was attended by senators Zeeshan Khanzada, Bilal Ahmed Khan, Nadeem Ahmed Bhutto, Mohsin Aziz and other officials from Ministry from Privatization, Power Division and Zarai Taraqiati Bank Limited (ZTBL). Aviation panel told: PIACL sell-off process almost over Secretary Privatization Commission, while sharing the revised business plan of privatization of the national flag carrier, stated that the due diligence process has begun for pre-qualified companies in the PIA privatization. Starting next week, site visits and expert sessions will begin for pre-qualified companies. Expert sessions will include briefings on aircraft conditions and routes, said Usman Bajwa. To a query, he said that a decision has been taken to launch PIA flights to Manchester starting from August 14. However, there are security concerns for PIA's North American routes. Efforts will be made to resolve security concerns regarding North American routes. He stated that PIA's current business model is not sustainable. In the previous bidding round, investors backed out because their demands were not met. He further briefed that now, investors will receive sales tax exemption on aircraft purchases. The government had to inject Rs100 billion annually to keep PIA running. The services of the previous financial advisor have been re-engaged for PIA's privatisation. During the meeting, the committee reviewed a report highlighting complaints of the pensioners of Pakistan International Airlines Corporation Limited (PIACL). It was also revealed that currently pension liabilities for 6,625 employees of PIACL amount to Rs14.87609 billion. Expressing concern, Chairman Committee Senator Dr Afnanullah Khan remarked that the pension amount is extremely low, asking how people are expected to survive. In response, the Ministry of Privatization stated that pension policies are regularly revised and updated annually in line with allowances. The chairman directed that Grade/Scale wise pension details, including the amount received and the distribution process, be presented in the next meeting. Privatization Commission informed the committee that the Board of the Privatisation Commission in its July 2025 meeting resolved as under:a) Pre-qualified the following interested parties as prospective bidders/pre-qualified bidders (PQBs): (i) Consortium comprising Lucky Cement Limited, Hub Power Holdings Limited, Kohat Cement Company Limited and Metro Ventures (Private) Limited; (ii) Consortium comprising Arif Habib Corporation Limited, Fatima Fertilizer Company Limited, City Schools (Private) Limited and Lake City Holdings (Private) Limited; iii) Fauji Fertilizer Company Limited, and iv) Air Blue Limited. b) Consortium comprising ASIL and Serene Air (Private) Limited, Bahria Foundation, Mega C&S Holding, Equitas Capital LLC, was not pre-qualified, as it did not meet the requirements of the Request for Statement of Qualification (RSOQ). The PQBs have been invited to conduct buy-side due diligence by giving access to Virtual Data Room. The PQBs will also be invited for pre-bid conference/meetings for finalisation of bid documents, Privatization Commission added. About the privatisation of power distribution companies, secretary Privatization Commission stated that the DISCOs face issues related to asset transfers, ownership of grid stations, and recoveries from government departments. The DISCOs are also facing challenges related to regulatory frameworks, payments to government entities, and pension liabilities and payments. He further said that 51 percent to 100 percent assets of the DISCOs' will be sold. Three DISCOs will be privatised between January and June of the current fiscal year. The committee was informed that the Pakistan Minerals Development Corporation (PMDC) is not yet included in Privatization list. Senator Zeeshan Khanzada questioned why this institution is being Privatized and asked about the purpose behind it. Senator Bilal Ahmed Khan also raised concerns, questioning why land is being granted/allotted if the government plans to privatise the institution. He further asked about the area under PMDC's operation and the quantity of mineral output. Senators further queried the basis of the privatization decision, noting that the Petroleum Ministry lacks the mandate to privatise the PMDC. In response, the minister clarified that the Cabinet Committee on SOEs is responsible for evaluating organisations and that the Petroleum Ministry can better explain its mandate. The committee was briefed on the privatisation process, which involves recommendations to the Board, Cabinet's approval, and hiring of financial/legal advisors through advertisements. The evaluation criteria will then be assessed before final approval. The Chairman Committee Senator Dr Afnanullah Khan proposed that PMDC be invited to the next meeting to further deliberate on this matter. Regarding ZTBL, the committee was informed that it is included in Phase One of the privatisation list approved by the government in August 2024. A total of 24 organisations are to be privatised. ZTBL is currently in the process of hiring a financial adviser. The ministry stated that the negotiations are in progress to finalise how ZTBL will be privatised. Moreover, Senator Dr Afnanullah Khan questioned the delay in hiring a financial adviser, noting that the last meeting was held on January 31st, when the bids were submitted and evaluated. He expressed concern that nearly six months had passed without finalizing the appointment. The ministry responded that the process typically takes six to eight weeks but was delayed due to high fee demands by one party nearly Rs500 million forcing a restart of the process. The ministry assured the committee that the complete privatisation process is now targeted to be completed within nine months. Furthermore, Senator Zeeshan Khanzada raised a critical point upon the overall privatisation process of the entities. He further questioned the rationale behind privatizing the entities while highlighting the performance of the Privatization Commission. He urged that this issue be thoroughly discussed in the committee. Copyright Business Recorder, 2025
Business Recorder
15-07-2025
- Business
- Business Recorder
Due diligence in process: Govt intends to dispose of PIACL assets
ISLAMABAD: The federal government has intended to dispose of operational assets of Pakistan International Airlines Company Limited (PIACL) in the last quarter of the current year after completion of 60 to 90 days due diligence process, a parliamentary panel has been apprised on Monday. Muhammad Farooq Sattar chaired the meeting of National Assembly's Standing Committee on Privatisation on Monday to get briefing on privatisation of PIA and First Women Bank Limited (FWBL). Four pre-qualified parties for PIA privatisation will now proceed to the buy-side due diligence phase from Tuesday (today) and process will be completed in 60 to 90 days period depending on the potential buyers, Privatisation Commission Secretary Usman Akhtar Bajwa informed the committee members. PIA privatisation: EoIs due today for up to 100% stake Four interested parties have been prequalified: Consortium comprising Lucky Cement Limited, Hub Power Holdings Limited, Kohat Cement Company Limited, and Metro Ventures (Private) Limited. Consortium comprising Arif Habib Corporation Limited, Fatima Fertilizer Company Limited, City Schools (Private) Limited, and Lake City Holdings (Private) Limited. Fauji Fertilizer Company Limited and Air Blue (Private) Limited. The prequalified parties will now proceed to the buy-side due diligence phase - a critical next step in the transparent and competitive privatisation process of PIACL. The chairman committee, however, recommended the government to assure the retention period for 6,700 PIA employees from three to four years after privatisation of the airlines. Earlier, secretary Privatisation Commission said that 20 to 25 percent surplus staff was present in the PIA, however, the potential buyers would need additional staff with the expansion of flying operation. He said that the commission would ensure retention of employees through negotiation with the potential buyers which was 18 months in the last round of PIA bidding. He said that out of four, three interested parties participated in previous round of bidding. Fly Jinnah did not participate in the bidding because Air Arabia was of the view that they had the experience to run only low cost airlines and not international airline like PIA. Responding to base price of the PIA operational assets, secretary said that it would be decided near bidding date. Depending on the interest and financial advisers transactional structure, he added. Secretary Commission further revealed expression of interest (EOI) for privatisation of Roosevelt Hotel in New York City would be invited in August 2025. Air Vice Marshal (retired) Muhammad Amir Hayat informed the committee that PIA has joint operation with Turkish Airline and Ethiopian Airlines. He disclosed that the financial health of PIA would further improve after restoration of its flight to Manchester (UK). Copyright Business Recorder, 2025
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
