Chinese firm among 8 consortia vying for majority shareholding in PIA

Fly Jinnah, Air Blue Limited are among others which have submitted SoQs

By
Israr Khan
Crew members disembark from a Pakistan International Airways (PIA) flight at Kabul Airport. — AFP/File
  • Privatisation Commission set to commence pre-qualification process.
  • Bidders will thoroughly investigate airline's operations and finances.
  • PCB and CCoP will approve evaluations made by potential investors.

ISLAMABAD: As Prime Minister Shehbaz Sharif-led government presses on with its privatisation agenda, several firms, including Chinese, have submitted Statements of Qualifications (SoQs) aiming to secure majority shares of the Pakistan International Airlines (PIA), The News reported on Saturday.

As per the publication, the government has received SoQs from Fly Jinnah, Air Blue Limited, Arif Habib Corporation Limited, Sardar Ashraf D Baluch – SHANXI CIG Co Ltd (China) and Gerry's International (Private) Limited.

Other consortiums who have submitted SoQs include one led by Y B Holdings (Private) Limited, another led by Pak Ethanol and a third one by Blue World City.

However, the Privatisation Commission has not disclosed the names of the underlying companies forming these consortia.

The development comes days after PM Shehbaz announced that the government will proceed with the privatisation of all state-owned enterprises (SOEs), excluding the strategic ones, regardless of their profitability or financial losses.

Chairing a high-level meeting in Islamabad, the premier said that apart from strategic state-owned enterprises, all the enterprises — profitable or loss-making — will be privatised.

Pakistan, in a deep economic crisis, agreed in June 2023 to overhaul loss-making state-owned enterprises under a deal with the International Monetary Fund (IMF) for a $3 billion bailout.

The national career had liabilities of 785 billion Pakistani rupees ($2.81 billion) and accumulated losses of Rs713 billion as of June last year.

Earlier this month, the Securities and Exchange Commission of Pakistan (SECP) approved the legal segregation of the national carrier provisioning the transfer of non-core assets and liabilities of PIA to PIA Holding Company Limited.

The scheme has been made effective from April 30, 2024 the press release said, adding that the SECP has directed the PSX, CDC and NCCL to ensure smooth listing of PIA Holding Company Limited as per the applicable rules and regulations.

It is to be noted that the federal government's Privatisation Commission is set to commence the pre-qualification process, following the criteria outlined in the Request for Statements of Qualifications (RSOQs), as per the PC Ordinance 2000 and associated regulations.

The privatisation process will proceed further only after the potential bidders and investors are duly assessed to be qualified.

These pre-qualified potential bidders will engage in thorough investigations into PIA's operations, finances, and other relevant aspects.

Qualified parties will then receive official documents and instructions necessary for participating in the bidding process.

Furthermore, a pre-bid conference will be held wherein these investors will be able to voice their concerns and raise questions before submitting their bids.

This will be followed by the Privatisation Commission Board (PCB) and the Cabinet Committee on Privatisation's (CCoP) approval of the valuation (reference price) for the sale of the majority stake in the PIA.

Subsequently, the actual bidding will take place after which the PCB and CCoP will review and endorse the results. Subsequently, the successful bidder would be issued a Letter of Intent, signalling the government’s intent to proceed with the sale.

This would be followed by the execution of the final sale agreement between the government and the successful bidder. Upon completion of the sale agreement, the government would receive the proceeds from the sale of the majority stakes in the PIA.