Below govt minimum: PIA stake sale attracts sole bid of Rs10bn

ISLAMABAD: The Blue World Consortium has submitted the only bid for a 60 percent stake in Pakistan International Airlines (PIA), offering Rs10 billion against the Privatization Commission’s minimum price of Rs85 billion.

The bidding process commenced at 1:30 pm and concluded at 6:30 pm. The PC had received only bid of Rs10 billion for a 60 percent stake in the airline and the consortium maintained its offer, stating that if the government did not accept their bid, it should continue operating the airline itself.

The government had pre-qualified six groups in June, but only Blue World City met the deadline for final document submission. The privatisation of PIA is a key part of the government’s efforts to reform state-owned enterprises and meet IMF commitments.

Chaudhry Saad Nazir, the chief of Blue World Group, expressed optimism about the future of PIA under their ownership. He pledged to revamp the airline within six months, utilising the best technical and financial expertise to transform it into a profitable entity.

Amir Mahmood, CEO of Allegiant Services and advisor for the PIA transaction, highlighted the importance of the deal for attracting foreign investment to Pakistan. A PIA spokesperson also emphasised the airline’s potential for profitability under new ownership.

Federal Minister for Privatisation Aleem Khan and chairman Cabinet Committee on Privatization did not attend the bidding process as accompanied by Prime Minister Shehbaz Sharif to Qatar.

Earlier, six entities had pre-qualified to bid for a 60 per cent stake in PIA, which includes several Pakistani budget carriers, including Fly Jinnah, Air Blue, Arif Habib Corporation, and three consortia led by YB Holdings (Private) Limited, Pak Ethanol, and Blue World City.

The pre-qualified bidders, citing concerns such as the airline’s financial liabilities, outdated fleet, and operational difficulties, stayed away from bidding.

An official of the commission said that the bid is not declined, it can’t be declined at opening stage. Bid offer has been received, It is below the reference price approved by CCOP.

Still the Bid offer will be submitted to the relevant forums i.e. PC Board, CCOP and finally the Cabinet, Cabinet is the final authority to accept or reject bid.

Copyright Business Recorder, 2024