Islamabad, March 26: The Cabinet Committee on Privatisation (CCoP), chaired by Deputy Prime Minister and Finance Minister Ishaq Dar, has approved the divestment of 51% to 100% share capital of Pakistan International Airlines Corporation Limited (PIACL), along with management control.
The equity stake may consist of a combination of shares held by PIA Holding Company and subscription shares, or either individually. The International Monetary Fund (IMF) has given its conditional approval for this crucial step.
On February 6, 2024, the Federal Cabinet sanctioned the transaction structure report, confirming the strategy to divest 51% to 100% of PIACL shares along with management control.
Consequently, the Privatisation Commission initiated the privatisation process and conducted a bidding round, which resulted in a single bid of PKR 10 billion against a reference price of PKR 85.03 billion.
This bid, based on terms set by the CCoP in its meeting on October 31, 2024, was subsequently rejected by the CCoP on November 14, 2024, following recommendations from the Privatisation Commission Board (PC Board) during its meeting on November 12, 2024.
The PC Board had also recommended engaging the IMF to address key issues raised by Pre-Qualified Bidders (PQBs), such as exemptions on the 18% Sales Tax and rectifying negative equity.
The objective was to facilitate PIACL’s privatisation and attract potential investors. Following this, fresh Expressions of Interest (EoI) for the divestment of PIACL were planned after securing clarity on these critical aspects.
IMF Talk on Privatization
Discussions with the IMF took place in November and December 2024, focusing on these key concerns. On December 11, 2024, the IMF provided conditional approval for the identified issues.
Subsequently, a high-level meeting, chaired by the Prime Minister at the Prime Minister’s Office (PMO) on December 12, 2024, strategized the next steps for PIACL’s divestment.
Given the IMF’s consent and the momentum generated during the initial privatisation attempt, it was decided to issue a fresh EoI in both local and international newspapers to gauge investor interest.
In compliance with the Prime Minister’s directives, the Special Investment Facilitation Council (SIFC) Secretariat formed a marketing committee on December 19, 2024.
Read More: Transaction Arrangement of PIA Privatization Recommended to CCOP
This committee, led by the Minister for Privatisation and comprising the Minister for Petroleum, Minister of State for Finance, and National Coordinator of SIFC, was tasked with engaging potential investors in PIACL’s privatisation.
The committee conducted three meetings on December 24, 2024, January 14, and February 11, 2025, to discuss various investor engagement strategies.
Based on deliberations from the PIA Marketing Committee and recommendations from EY Consulting LLC, Dubai, the PC Board, in its meeting on March 17, 2025, recommended a revised transaction structure for the second privatisation attempt.
This structure includes the divestment of 51% to 100% of PIACL’s share capital as a single class of ordinary shares, coupled with management control. The equity stake may consist of:
- The sale of shares held by PIA Holdco
- Subscription shares of PIACL
- A combination of both
The PC Board also determined that the final terms and conditions for transferring and acquiring the equity stake—potentially differing from those established during the first privatisation attempt—would be finalized during the bidding process and included in the bid documents for CCoP’s approval.
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The recommendation to the PC Board to restart the privatisation process based on this transaction structure has been submitted to the CCoP for approval, as per the Cabinet Division’s Notification of March 21, 2024.
An official statement confirmed that the committee approved an expedited plan for PIACL’s privatisation, including the divestment of 51% to 100% share capital along with management control.
The Deputy Prime Minister reaffirmed the government’s commitment to PIACL’s privatisation, emphasizing its potential to enhance operational efficiency and alleviate financial strain on the national exchequer.
