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Pakistan Advances Privatization of PIA After Intense Bidding for 75% of Airline

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The privatization of Pakistan International Airlines (PIA) took a decisive step this Tuesday with the selection of a majority buyer, in a process closely followed by authorities, analysts, and the public. The operation represents an economic milestone for the country and marks a turning point for the historic state-owned airline.

A Consortium Led by Arif Habib Wins the Auction

A consortium headed by Arif Habib Corporation emerged as the highest bidder by offering 135 billion Pakistani rupees, equivalent to $482.32 million, for a 75% stake in PIA. The bid surpassed that of a rival group led by Lucky Cement, following a competitive exchange that was broadcast live on television.

The event, widely publicized by the Pakistani government, sought to reinforce the transparency of the process and attract national attention. During the ceremony, sealed envelopes with proposals from three companies were deposited into a transparent box bearing the national emblem, under the gaze of cabinet members and a massive television audience.

A Process Watched by the Entire Country

Official announcements invited the public to witness the event, presented as the moment when the “legend of PIA returns to glory.” The box was opened with scissors, and subsequently, officials read each submitted figure aloud.

In addition to the winning consortium and the group led by Lucky Cement, the private airline Air Blue participated with a $95 million offer, an amount that did not meet the established minimum price.

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Second Attempt After a Failed Try

The auction represents the government’s second attempt to sell PIA. A previous effort, conducted last year, failed after receiving a single offer of $36 million for 60% of the company, well below the official minimum valuation of $305 million.

This time, the floor set for the 75% stake was approximately $357 million, a figure that was ultimately exceeded after the bidding between the two main competitors.

First Major Privatization in Nearly Two Decades

The sale of a majority stake in the flag carrier would be the first large-scale privatization in Pakistan in nearly twenty years. This step is part of a broader reform program, initiated after the country secured a $7 billion financial bailout from the International Monetary Fund.

Payment Terms and Next Steps

As stipulated, the winning consortium must pay 67% of the offered amount within 90 to 120 days, while the remainder will be paid one year later. After the award, the challenge will be to transform the company and consolidate its operational recovery.

“This is a victory for Pakistan,” declared Shahid Habib, Chief Executive of Arif Habib Limited, to Reuters after the auction. He added that the group will work to turn the company into “one of the best airlines in the world.”

Government’s Role in Reviving PIA

As part of the rescue plan, the state has assumed the bulk of the airline’s legacy debt. Thanks to these measures, PIA recorded its first pre-tax profit in two decades.

This progress is coupled with the decision by the United Kingdom and the European Union to lift a five-year ban that prevented the company from operating on key routes, a factor that, according to analysts and officials, helped raise its valuation before the auction.

A Sale Open for Up to 100% of the Company

According to Muhammad Ali, the prime minister’s adviser on privatization, the government is willing to sell up to 100% of PIA. Currently, the company is valued at 180 billion rupees, and any additional stake above 75% would be subject to a 15% premium.

The operation is part of a broader strategy that also includes the privatization of state banks, energy companies, and other loss-making public entities, in an attempt to improve national finances and attract private investment.

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