From bailouts to business: The dawn of a post-privatization PIA |
https://arab.news/neg58
For global investors watching frontier and emerging markets, Pakistan’s long-delayed privatization of its national airline marks more than the sale of a distressed asset. It is a signal event. After decades of aborted attempts, political reversals and billions in taxpayer-funded bailouts, the divestment of a 75 percent stake in Pakistan International Airlines (PIA), above the government’s reference price, represents a historic moment in the country’s economic history.
The timing of this sale is not accidental. It is the product of converging pressures and institutional alignment that had previously been absent. The International Monetary Fund (IMF) program imposed hard fiscal constraints, while the Special Investment Facilitation Council (SIFC) created a single-window framework capable of coordinating stakeholders, a critical requirement in a political economy as fragmented as Pakistan’s. The failed privatization attempts of the past, which attracted only one inadequate bid, served as a costly lesson. In contrast, the 2025 process was structured to restore credibility: liabilities were carved out, the reference price was somewhat realistic, and the bidding was televised to reinforce transparency.
From an investor’s perspective, it is essential to understand what was actually sold. The state did not merely offload a loss-making airline; it sold a platform asset stripped of its historical baggage. By isolating legacy debt, the government presented a “clean” operating company with........