ISLAMABAD, March 19: The 231st meeting of the Privatisation Commission Board, held on Monday, focused on important steps towards the privatisation of key state-owned assets, particularly Pakistan International Airlines Corporation Limited (PIACL) and Roosevelt Hotel Corporation (RHC).
Chaired by Muhammad Ali, the newly appointed adviser to the Prime Minister on Privatisation and Chairman of the Privatisation Commission, the meeting started with a key agenda item: the approval of the transaction structure for PIACL’s divestment.
The board proposed that 51% to 100% of PIACL’s share capital be divested, including management control, in the second attempt at privatising the airline.
The final terms and conditions for this transaction will be finalized during the bidding process and will be subject to approval by the Committee on Privatization (CCoP).
Additionally, the board discussed the potential privatisation of Roosevelt Hotel Corporation (RHC) in New York.
The board agreed to hold a briefing with the financial adviser before making any further decisions regarding RHC’s divestment.
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It seems like significant moves are being made to restructure and privatize these assets, with much of the finer details to be settled as the processes unfold.
Bidding of PIA
The final bidding process for the divestment of Pakistan International Airlines (PIA) attracted just one bid of Rs10 billion for a 60% shares.
The failed bidding process for the privatization of Pakistan International Airlines (PIA) in 2024 faced significant challenges, ultimately leading to its failure. Initially, the government sought to sell a controlling stake in PIA to private investors, with the aim of reducing state ownership and management involvement.
The transaction structure proposed involved divesting 51% to 100% of the airline’s shares, along with management control, in an effort to revitalize the struggling national carrier.
However, the bidding process struggled due to multiple factors. PIA’s heavy financial liabilities, including debts and pension obligations, deterred potential investors.
Furthermore, the airline’s operational inefficiencies, outdated fleet, and ongoing management challenges were major concerns.
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Political resistance and opposition from unions also played a role, as privatizing such a crucial national asset sparked protests and fears of job losses.
Due to these issues, the privatization attempt failed to attract serious bids or produce any viable offers.
As a result, the government had to revise its approach, planning a second attempt with a more carefully considered transaction structure.
Despite the failure in 2024, efforts are ongoing to privatize PIA, with the hope of addressing these hurdles in the next bidding process.
