ISLAMABAD: Privatisation Commission’s Board has approved Earnest and Young-led consortium as financial advisor (FA) for evaluation of Pakistan International Airline Co Ltd (PIACL) assets with the purpose to privatise the entity by end January 2024.

Eight companies including three ‘top listed 20 financial FA firms’ responded to the request for a proposal to prepare plans for privatisation and bifurcation of the PIA into core and non-core entities.

In a statement, it said that the FA appointment procedure was appreciated by the board members.

PIA, other loss-making SOEs: PM for accelerating privatisation process

On October 6, the interim cabinet approved the direct hiring of FA for PIA privatisation. The cabinet had decided to hire an international financial advisor by directly inviting proposals from the top 25 global financial firms to save time.

The board further renewed/ extended the contracts of FA for the privatisation of House Building Finance Corporation (HBFC) and First Women Bank Ltd.

The board further decided to fix responsibility for the delay in the privatisation of the entities.

The committee also discussed at length the issues regarding 35-year-long pending privatisation of Pak China Fertiliser Limited.

Eight interested parties submitted their technical and financial proposals for the hiring of financial advisor for privatisation of the PIACL.

On the basis of the laid down criteria, the evaluation committee formed by the board declared the Consortium led by Earnest & Young as the “Top-ranked Interested Party”.

The board formed a negotiating committee and tasked it to conclude the financial services agreement with the top-ranked bidder.

The financial services agreement with the financial advisor on the privatisation of HBFCL had expired in January 2023 and the board accorded approval for a 24-month extension. The board also accorded approval to the revision of cost due to additional work required from the financial advisor.

Similarly, the financial services agreement with the financial advisor on the privatisation of FWBL had expired in April 2023.

The agreement has been accorded a 24-month extension with price adjustment for changed scope of work. The board decided that the responsibility for the unnecessary delay in the privatisation of both HBFCL and FWBL may be fixed after a detailed enquiry into the matter.

The board after considering the issues and litigation in the privatisation of Pak China Fertiliser Limited directed that details of all proceedings since the initiation of the contract for privatisation be shared with the board in its next meeting.

The board resolved to determine the factors behind the change of stance of the privatisation commission more than once despite the arbitration award decision in 1997.

It was decided that the board would form a final stance for presenting to the court in its next meeting after considering all the details involved.

Copyright Business Recorder, 2023