PIA privatization: Lucky Cement says no binding commitment yet

Lucky Cement Limited, one of Pakistan’s largest conglomerates, clarified that it has not entered into any binding commitment to acquire Pakistan International Airlines (PIACL), despite being part of a consortium shortlisted to conduct due diligence for a potential 51%-100% equity stake in the airline.

In its notice to the Pakistan Stock Exchange (PSX) on Wednesday, the cement maker said any decision to proceed will depend on the outcome of the due diligence process and necessary approvals.

Lucky Cement informed that the consortium, together with other interested parties, has been pre-qualified by the Privatisation Commission and shortlisted to conduct financial, technical, and legal due diligence on PIACL.

“For clarity, neither the company nor the consortium has entered into any binding commitment with any party for the acquisition of equity in PIACL,” Lucky clarified.

“Any such commitment would only be made following satisfactory completion of due diligence, receipt of all applicable corporate and regulatory approvals, and a determination that the transaction is commercially viable.”

It added that at this stage, the company, through the consortium, intends only to “undertake a comprehensive due diligence exercise and evaluate the viability of the potential acquisition opportunity.”

“Lucky Cement Limited, together with other prominent corporate entities-namely Hub Power Holdings Limited, Kohat Cement Company Limited, and Metro Ventures (Private) Limited-formed a consortium and submitted an Expression of Interest and Statement of Qualification for the proposed acquisition of a 51% to 100% equity stake, along with management control, in Pakistan International Airlines Corporation Limited (PIACL), being offered for divestment by the Government of Pakistan through a privatization process,” read the notice.

The government on Tuesday said it had approved four parties to potentially bid for a stake in debt-ridden PIA.

Among the bidding groups, one is a consortium consisting of Lucky Cement, Hub Power Holdings, Kohat Cement and Metro Ventures.

Another is led by investment firm Arif Habib Corp, and includes fertiliser producer Fatima Fertilizer, private education operator The City School, and real estate firm Lake City Holdings.

Additionally, Fauji Fertilizer Company and Pakistani airline Airblue have been approved to bid for PIA.

Fauji Fertilizer Company (FFC), in its notice to the bourse, announced that its board has authorised the company to commence buy-side due diligence of PIACL to evaluate the potential acquisition of PIACL.

“We wish to clarify that any binding arrangement in relation to the proposed transaction remains subject to (a) the results of the aforementioned due diligence exercise, (b) the submission by the Company (and acceptance by the PC) of a competitive bid in relation to the proposed transaction, (c) execution of definitive agreements between the parties to the proposed transaction, and (d) fulfilment of all relevant and requisite corporate, regulatory and other approvals and consents,” read the notice.

The government plans to offer PIA’s equity stake through a competitive bidding process.

Pakistan has been seeking to sell a 51%-100% stake in the struggling national airline to raise funds and reform cash-draining, state-owned enterprises as envisaged under a $7 billion International Monetary Fund programme.