By As the government, led by Prime Minister Shehbaz Sharif, advances its privatisation agenda, numerous firms, including some from China, have submitted Statements of Qualifications (SoQs) to acquire majority shares of Pakistan International Airlines (PIA), according to The News.
The government has received SoQs from Fly Jinnah, Air Blue Limited, Arif Habib Corporation Limited, Sardar Ashraf D Baluch in partnership with SHANXI CIG Co Ltd (China), and Gerry’s International (Private) Limited. Additionally, consortiums led by Y B Holdings (Private) Limited, Pak Ethanol, and Blue World City have also submitted SoQs. However, the Privatisation Commission has not disclosed the specific companies within these consortia.
This move follows Prime Minister Shehbaz’s recent declaration that the government will privatise all state-owned enterprises (SOEs), excluding strategic ones, regardless of their financial status. This decision aligns with the government’s agreement with the International Monetary Fund (IMF) in June 2023, which mandates the overhaul of loss-making SOEs as part of a $3 billion bailout deal.
As of June last year, PIA had liabilities amounting to 785 billion Pakistani rupees ($2.81 billion) and accumulated losses of 713 billion rupees. Recently, the Securities and Exchange Commission of Pakistan (SECP) approved the legal segregation of PIA’s non-core assets and liabilities, transferring them to PIA Holding Company Limited. This reorganization, effective from April 30, 2024, is intended to facilitate the smooth listing of PIA Holding Company Limited as per SECP directives.
The Privatisation Commission will now begin the pre-qualification process, adhering to the criteria outlined in the Request for Statements of Qualifications (RSOQs) under the PC Ordinance 2000 and related regulations. The process includes a thorough assessment of potential bidders, who will then conduct detailed investigations into PIA’s operations and finances. Pre-qualified bidders will receive the necessary documentation to participate in the bidding process.
A pre-bid conference will allow investors to address any concerns before submitting their bids. Following this, the Privatisation Commission Board (PCB) and the Cabinet Committee on Privatisation (CCoP) will approve the valuation for the majority stake sale. The actual bidding will ensue, with the results reviewed and endorsed by the PCB and CCoP. The successful bidder will then receive a Letter of Intent, signaling the government’s intent to finalize the sale. The process concludes with the execution of the final sale agreement and the receipt of sale proceeds by the government.
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