In a major step towards privatisation, the shareholders of PIA Holding Company Limited (PIAHCL) have approved the divestment of a 75% stake in Pakistan International Airlines Corporation Limited (PIACL).
The divestment would be executed through a combination of share transfer and dilution, PIAHCL said in a notice to the Pakistan Stock Exchange (PSX) on Monday.
Last year, a consortium headed by the Arif Habib Corporation emerged as the top bidder in a live-televised auction for a 75% stake in PIA, marking a breakthrough for the government’s long-delayed privatisation of the carrier.
The Arif Habib consortium offered Rs135 billion, i.e. $482.14 million, surpassing a government reserve price of Rs100 billion.
“The members hereby approve the divestment of 75% of the issued and paid-up share capital of PIACL held by the company through a combination of: (i) transfer of shares owned by the company; and (ii) dilution of company’s shareholding as a result of subscription of shares in PIACL by PIA Equity Limited, strictly in accordance with the terms and conditions of the transaction documents,” read a copy of the resolution passed by the shareholders of PIAHCL on Monday.
PIAHCL shareholders have also approved the potential future sale and transfer of the remaining 25% shareholding of the company in PIACL, if PIA Equity Limited exercises the call option in accordance with the Share Purchase and Subscription Agreement (SPSA).
“Upon valid exercise of such call option in terms of the SPSA and subject to satisfaction of the applicable conditions set out therein, the company shall be authorised and obligated to transfer such residual shareholding in PIACL to PIA Equity Limited in accordance with the SPSA,” read the resolution.
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PIAHCL is a public limited company incorporated under the laws of Pakistan and is currently majority - owned by the Government of Pakistan.
PIAHCL was established by the Government of Pakistan to succeed in specified assets, liabilities, and subsidiaries of Pakistan International Airlines Corporation Limited, including specific business, property, rights, liabilities, and obligations of PIACL.
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