Ahead of the bidding process for Pakistan International Airlines Corporation Limited (PIAC) on Dec. 23, the Privatization Commission on Sunday announced that three prospective buyers remain in the race following the exit of Fauji Fertilizer Company Limited.
In a program issued to media, the Privatization Commission said bids would be submitted between 10:45 a.m. and 11:15 a.m., and opened at 3:30 p.m., with the process broadcast live in accordance with directions of Prime Minister Shehbaz Sharif.
The three final bidders comprise a consortium of Lucky Cement Limited, Hub Power Holdings Limited, Kohat Cement Company Limited, and Metro Ventures (Private) Limited; a consortium of Arif Habib Corporation Limited, Fatima Fertilizer Company Limited, City Schools (Private) Limited, and Lake City Holdings (Private) Limited; and Air Blue (Private) Limited.
According to Privatization Commission Chairman Muhammad Ali, the sealed bids would be placed in a transparent box after submission, followed by a meeting of the Board to fix the reference price. Subsequently, the Cabinet Committee on Privatization (CCoP) would meet and approve the reference price, with authorities announcing it as the bids are opened.
If multiple bids are higher than the reference price, he said, the process would proceed to an open auction. If all the bids are less than the reference price, the highest bidder would be prioritized.
After the bidding process is completed, the federal cabinet would approve the transaction, followed by the signing of documents. This would be followed by a 90-day period to allow the fulfillment of procedures, including the transfer of properties, liabilities and leased aircraft.
Ali has said the bid amount entails ownership of a 75% in PIA, with 92.2% of this amount going to PIA instead of the national exchequer. The remaining 7.5% would be deposited with the government. The government retains 25% in PIA, with the winning bidder having the option to acquire it with additional payment within 90 days.
Two-thirds of the winning bid must be deposited within 90 days, while the remaining third would be deposited within a year.
The proposed agreement also calls for a freeze on employee dismissals for a year, with existing pensions and perks fully protected. Pension liabilities of retired employees, including medical benefits and discounted tickets, would be borne by the holding company created by the company to incentivize the sale of PIA.