ISLAMABAD: Pakistan concluded the sale of a controlling stake in its national carrier, Pakistan International Airlines (PIA), on Tuesday, finalizing a deal worth Rs135 billion ($485 million) following a televised auction in the capital.
The Arif Habib Consortium submitted the highest offer for the 75% stake in the PIA, surpassing a bid from a group led by Lucky Cement Limited. The final price exceeded the government's reference price of Rs100 billion ($357 million) established earlier in the day.
Finance Minister Muhammad Aurangzeb said the transaction would help integrate Pakistani institutions into the global economy.
“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,” Aurangzeb said at the ceremony. “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.”
The auction began with sealed offers from three pre-qualified groups: Arif Habib, Lucky Cement, and Airblue. In the first round, the Arif Habib group offered Rs115 billion ($410.7 million), while the Lucky Cement group offered Rs101.5 billion ($362.5 million). The Airblue consortium submitted a bid of Rs26.5 billion ($94.6 million)and was eliminated for falling below the minimum reference price.
A second round of bidding followed between the two remaining groups, starting with a base price of Rs115 billion ($357 million) and a minimum increment of Rs250 million ($892,782). Lucky Cement raised its offer to Rs134 billion ($478.5 million) before the Arif Habib group submitted the final bid of Rs135 billion. Lucky Cement did not submit a further counteroffer.
Privatization Minister Muhammad Ali said the government aimed for transparency by engaging multiple bidders. He stated that 92.5% of the sale proceeds will be reinvested into the airline to fund operations and fleet expansion. The remaining 7.5% will go to the government exchequer.
The terms of the sale require the new owners to expand the airline's fleet from 18 operational aircraft to at least 30 within 3-4 years. The government retains a 25% stake in the carrier, which the winning consortium has the option to purchase within 90 days.
The sale is part of an economic reform agenda linked to a $7 billion loan program from the International Monetary Fund, which mandates the privatization of loss-making state-owned enterprises. The government previously transferred approximately Rs600 billion ($2.14 billion) of the airline’s debt to a holding company to facilitate the sale.
This auction follows an unsuccessful attempt to sell the airline in November 2024, when a sole bidder offered Rs10 billion ($35.7 million) against a reference price of Rs85 billion ($303.5 million).
The final bid requires formal approval from the Cabinet Committee on Privatization.
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