Arif Habib Wins PIA Privatisation Bid for Rs135bn
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ISLAMABAD: Arif Habib secured the winning bid of Rs135 billion for Pakistan International Airlines Corporation Ltd (PIAC) following an open auction in Islamabad, marking the nation’s first major privatisation in almost two decades.
Pre-qualified bids were initially submitted by Lucky Cement, Airblue, and Arif Habib. Airblue withdrew after the first round with a bid below the reference price of Rs100 billion.
The first round saw bids of Rs101.5 billion from Lucky Cement, Rs26.5 billion from Airblue, and Rs115 billion from the Arif Habib consortium, leading to the announcement of the reference price.
A 30-minute consultation period followed for the top two bidders before commencing a second round.
This round began with a base bid of Rs115 billion and a minimum increment of Rs250 million, based on arif Habib’s highest bid from the first round.
A brief competition ensued, but when Lucky Cement raised its bid to Rs134 billion, Arif Habib countered with Rs135 billion, prompting Lucky Cement to concede and offer congratulations.
The entire process was broadcast live on television and social media platforms.
Privatisation Adviser to the prime Minister, Muhammad Ali, is scheduled to hold a press conference following the bidding’s conclusion.
Privatisation will ‘promote’ investment
Arif Habib,upon winning the bid,stated the privatisation would “promote” investment within the country.
“PIA is our national institution,” Habib said, adding that the airline “has witnessed days of glory and was once ranked number two in the world,” and praising its “very competent” employees.
He expressed optimism about addressing existing shortcomings with new capital investment.
Regarding expansion plans, Habib stated, “Initially, we plan to expand the fleet to 38 aircraft in the first phase, then to 65, depending on demand.”
The accomplished bidder assured confidence for PIA employees and the opportunity to “realize their potential,” predicting growth in employment opportunities as the airline expands, with existing experienced staff also benefiting.
“When all necessary capital investment is made, they will perform well.”
‘A very good start”
Economist and policy expert Khaqan Najeeb lauded the privatisation as a “sought-after” micro-economic reform that “must ta
Aurangzeb hopes PIA sale will bring investment
Finance Minister Muhammad Aurangzeb, speaking at the bidding ceremony, thanked the PM’s aide and his team for their efforts and hailed the bidding process in terms of clarity.
“It takes a lot of time and effort to get to a good place where we are today,” he said.
“All of the bidders today are from Pakistan. I used to say that no matter which team wins, Pakistan would win.”
He lauded pakistan’s biggest conglomerates for “vying for the best airline” and said that the flag carrier would be led by investors and some of Pakistan’s most experienced businesspeople.
“The fact that they have stepped up is a doubtless sign that anyone who is the successful bidder will take it not only to where we were, but where we need to be in the comity of nations,” Aurangzeb added.
“We need to stop the bleeding and losses, but more importantly, our institutions need to be part of the comity of nations, and we will take them there,” he added.
Aurangzeb also expressed hope that the bidding would increase the number of local investors and,in turn,the number of foreign investors entering the country.
“The government, through the privatisation of business entities under state custody, will not only save itself from losses in the thousands of billions but also accelerate the process of economic recovery,” he wrote, congratulating the privatisation commission.
defense Minister Khawaja Asif took to X to celebrate the sale, calling it a “growing vote of confidence in the national economy”.
Asif added that Europe and the UK lifting bans on PIA’s operations was a major contributor to the success of today’s deal.
“From a bid of Rs10bn in the past to a price of Rs135bn today, it is proof of trust in our Civil aviation Regulator.”
He also assailed the PTI government for leaving “no stone unturned to destroy PIA”, adding that it took three years to rebuild the flag carrier.
At the outset of the ceremony, the adviser to the prime minister on privatisation addressed the audience.
Ali hoped that PIA’s privatisation would open “paths for investment in the country”.
“I would also like to thank all bidders who are present today, and those who were part of the bidding process but did not reach the final round.We wouldn’t have been here without them, and this process wouldn’t have been completed,” he said.
“we actively engaged with all the bidders.Two of them demanded to take up to 75 per cent at least, and the other two demanded 100pc,” he said.
“We wanted a multitude of bidders so the process of bidding would be clear and competitive,” he continued.
He said that the government had “decided to sell at least 75pc of shares, and simultaneously, we also decided to offer the other 25pc”.
“Bidders will have the right to consider and let the government know if they also want to buy the other 25pc in the next 90 days,” he said.
He further said, “The transaction would be from 75pc up to 100pc; though, 75pc of them will be made available for sale to
Pakistan International airlines (PIA) Privatization: Bidding Begins with Strict Rules
The privatization of Pakistan International Airlines (PIA) officially commenced on Tuesday with a sealed-bid auction process, broadcast live and overseen by transparent procedures. the outcome will determine which of three consortiums will acquire a majority stake in the struggling flag carrier.
according to Aviation Minister Ali, the bidding process involves sealed envelopes, transparent boxes for viewing, and a live telecast to ensure transparency. “When the price is determined, the envelopes will be opened. They will compete, and whoever has the highest bid will [succeed],” he stated. He also acknowledged the uncertainty of the final bid amount, noting, “Only God knows how high the bid will go, but the process must come back to the cabinet.” [https://www.dawn.com/news/1963499/pia-privatisation-bidding-starts-unsuccessful-bidders-to-be-excluded-from-management]
Unsuccessful Bidders barred from Future Management
A unique stipulation of the privatization process excludes unsuccessful bidders from any future management role within PIA. Aviation Minister Ali explained that losing consortiums will not be permitted to join the winning bidder, limiting future involvement to groups not participating in the auction. [https://www.dawn.com/news/1963499/pia-privatisation-bidding-starts-unsuccessful-bidders-to-be-excluded-from-management]
This rule allows Fauji Fertiliser Company Ltd, which previously withdrew from the bidding process, [https://www.dawn.com/news/1962584/three-in-race-as-pia-bid-opens-tomorrow] the potential to join the new management team after the acquisition, should they choose to do so.
Failed Dealings Before the Auction
Prior to Tuesday’s bidding, reports emerged of attempted behind-the-scenes negotiations between the Arif Habib and Lucky Cement groups, which ultimately failed. Journalist Kamran Khan reported on a proposed arrangement to divide the controlling stake among three of the four initially interested parties.Khan claimed the Lucky Cement group,led by Muhammad Ali Tabba,rejected the proposal. [https://twitter.com/AajKamranKhan/status/2003002414220341506]
Both Tabba and a government official confirmed the informal meeting took place,clarifying it was not government-brokered. Tabba expressed confidence in the privatization process to Dawn, stating the proposal was presented to him following a meeting in Islamabad, but he chose not to pursue it. [https://www.dawn.com/news/1963499/pia-privatisation-bidding-starts-unsuccessful-bidders-to-be-excluded-from-management]
Additional input from Reuters
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