The Ministry of Privatisation announced on Thursday that the government will seek expressions of interest for the sale of Pakistan International Airlines (PIA) next week, just days after the national flag carrier reported its first annual profit in over two decades.
Authorities are aiming to sell a stake ranging from 51% to 100% in the debt-laden airline to generate funds and reform financially draining, state-owned enterprises, a key objective under a $7 billion International Monetary Fund programme.
A previous attempt to privatise PIA last year only attracted a single offer, which was significantly below the asking price of over $300 million.
The Privatisation Commission board has now approved the solicitation of new bids, the ministry stated.
“The board approved the pre-qualification criteria for selection of prospective bidders,” the statement read. It further noted that new expressions of interest for acquiring between 51% and 100% of the airline would be sought in the coming week.
Following issues raised by potential buyers that led to the failure of the last privatisation attempt, Pakistan has transferred almost all of the national carrier’s legacy debt to government accounts.
Muhammad Ali, the adviser on privatisation, stated last week that all the concerns raised during the previous year’s unsuccessful attempt had been addressed.
The government intends to finalise the airline’s privatisation before the end of the current year.
Prime Minister Shehbaz Sharif announced plans last year to divest all state-owned enterprises.
In his statement last week, the adviser also mentioned that the process to privatise power distribution companies had commenced, describing it as a “high priority transaction.”
He indicated that some companies initially slated for sale in the second phase were being moved to the first phase of the privatisation plan.
The adviser further revealed that the government had engaged Jones Lang LaSalle as an advisor to explore various sale options for the PIA-owned Roosevelt Hotel building in Manhattan, New York.
These options include selling the building in its current condition or pursuing a joint venture with a leading developer, an approach that Ali suggested has the potential to generate proceeds five times higher than a direct sale.
