ISLAMABAD: A successful bid of Rs135bn by Arif Habib won the auction for Pakistan International Airlines Corporation Ltd (PIAC) after the process moved to an open auction round at a ceremony in Islamabad, marking the country’s first major privatisation in nearly two decades.

Initially, pre-qualified bids were submitted by Lucky Cement, private airline Airblue and investment firm Arif Habib in the morning. Airblue exited the race after the first round of bidding, with a proposition lower than the reference price of Rs100bn.

In the first round, Lucky Cement put up a bid of Rs101.5bn, Airblue Rs26.5bn, and the Arif Habib consortium bid Rs115bn, after which the reference price was announced.

Following that, a 30-minute break was taken so that the two top bidders could hold consultations. A second round was then commenced.

It began with the base bid at Rs115bn, and the minimum increment was at Rs250 million. The base price was set on the basis of the highest bid made during the first round by Arif Habib.

Both bidders engaged in a brief competition to outbid each other during the round. However, when Lucky Cement raised its bid to Rs134bn, Arif Habib countered with Rs135bn, forcing Lucky Cement to bow out and congratulate Arif Habib.

The whole process was telecast live and streamed across all TV channels as well as the respective social media handles of the government.

Adviser to the prime minister on privatisation, Muhammad Ali, will also hold a press conference after the conclusion of the bidding process.

After winning the bid to acquire the national airline, business owner Arif Habib said the privatisation will “promote” investment in the country.

“PIA is our national institution,” Habib said.

“The national airline has witnessed days of glory and was once ranked number two in the world. All its employees are very competent,” he added.

Habib said he is hopeful of resolving all shortcomings with the new capital investment.

When asked about his expansion plans, he said, “Initially, we plan to expand the fleet to 38 aircraft in the first phase, then to 65, depending on demand.”

The successful bidder assured he would give “confidence to PIA employees” and help in “realising their potential.”

“Employment opportunities will grow as we expand,” Habib said. “The existing experienced employees will also get opportunities.”

“When all necessary capital investment is made, they will perform well.”

Later, speaking on Geo News programme ‘Aaj Shahzeb Khanzada ke Saath’, the business tycoon said that he was willing to bring in foreign airlines once the transaction was completed.

Asked if he was willing to bring in additional investors, including foreign airlines, Habib expressed hope that they would come on board.

“Now that we’re the highest bidder and once the cabinet approves the deal, we will have about 90 days to negotiate with them and possibly bring them into the airline,” he replied.

Habib added that his company would approach airlines, adding that once the consortium acquires PIA, it will demonstrate that it is able to put more capital into the flag carrier.

He also noted that the consortium‘s bid was Rs4bn higher than their adviser’s valuation.

“I think our adviser’s valuation was Rs131bn, so when the bidding happened, we ended up paying an entry premium,” he said, adding that this provision is needed when buying an active business.

“Considering the Lucky Group is strong and has deep pockets, that was something we took into consideration. We were expecting that this transaction would be achieved at around Rs130bn,” the tycoon elaborated.

Habib said it was a “big comfort” because when bids increase, there is more funding available for development and turnaround.

“This was a big factor behind the valuation,” he said.

Habib stated that he wanted to purchase a 100pc stake in PIA, but the transition commission produced a “very........

© Dawn Business