PIA to be run by new owners from April subject to approvals, says PM’s adviser |
Pakistan International Airlines (PIA) is expected to be run by a new owner from April next year, subject to approvals, and receive fresh capital under a deal to privatise the flag carrier, Adviser to the Prime Minister on Privatisation Muhammad Ali said on Wednesday.
A consortium headed by the Arif Habib Corporation emerged as the top bidder in a live-televised auction for a 75 per cent stake in PIA on Tuesday, marking a breakthrough for the government’s long-delayed privatisation of the carrier.
The Arif Habib consortium offered Rs135 billion, surpassing a government reserve price of Rs100bn, in a sharp turnaround from last year’s failed sale attempt.
Muhammad Ali, the privatisation adviser to the prime minister, told Reuters in an online interview that the state expects a new owner to be running the airline by April, subject to approvals.
The process now moves to final approvals by the Privatisation Commission board and the cabinet, expected within days, with contract signing likely within two weeks and financial close after a 90-day period to meet regulatory and legal conditions.
Ali said the government would receive about Rs10bn in cash upfront and retain a 25pc stake valued at around Rs45billion.
The deal was structured to inject fresh capital into the airline rather than simply transfer ownership, he said.
“We did not want a situation where the government sells the airline, takes its money and the company still collapses,” Ali said.
The winning consortium also comprises fertiliser maker Fatima, private school network City Schools and real estate firm Lake City Holdings Limited.
Ali said Fauji Fertiliser Company did not bid but could still join the winning consortium as a partner, noting the buyer can add up to two partners including a consortium partner or a foreign airline if they meet the........