The Privatization Commission Board on Tuesday approved the prequalification of four parties for bidding on the acquisition of Pakistan International Airlines (PIA), advancing the government’s agenda of offloading loss-making state-owned entities.
In its 237th meeting, chaired by Adviser to the Prime Minister on Privatization Muhammad Ali, the Privatization Commission Board reviewed the Prequalification Committee’s recommendations based on the evaluation of statements of qualification submitted by five prospective investors, taking into consideration technical, financial, and documentary requirements defined in the Request for Statement of Qualification.
Following thorough scrutiny, four parties have been prequalified:
- Consortium comprising Lucky Cement Limited, Hub Power Holdings Limited, Kohat Cement Company Limited, and Metro Ventures (Private) Limited
- Consortium comprising Arif Habib Corporation Limited, Fatima Fertilizer Company Limited, City Schools (Private) Limited, and Lake City Holdings (Private) Limited
- Fauji Fertilizer Company Limited
- Air Blue (Private) Limited
The prequalified parties would now proceed to the buy-side due diligence phase to ensure the transparent and competitive privatization process of the PIA. A fifth consortium of Augment Securities and Investments, Serene Air, Bahria Foundation, Mega C&S Holding and Equitas Capital LLC did not qualify for bidding.
The government aims to divest majority shares in PIA along with management control. A previous attempt, with a minimum price of Rs. 85.03 billion and Rs. 45 billion debt, failed to attract more than a single bid above or at the minimum price. In this round, the government has further reduced the debt, with officials saying bidding would take place in the final quarter of the calendar year.
Roosevelt Hotel
Also on Tuesday, the Cabinet Committee on Privatization approved the transaction structure for the Roosevelt Hotel, New York, as proposed by the Privatization Commission Board.
The financial adviser had evaluated three options for the divestment: (i) outright sale (ii) joint venture with multiple options (iii) long-term lease. Of these, the cabinet committee has approved the joint venture model with multiple options, which aims to maximize long-term value for the country while ensuring flexibility, multiple exit opportunities, and minimizing future fiscal exposure. Under the joint venture model, the government is not expected to pay any additional money, with its contribution coming in the form of the hotel’s land value.
In a statement, the government has said the two decisions reflect its strong commitment to advancing economic reform and the privatization agenda in a transparent, market-driven, and investor-friendly manner.