ISLAMABAD: As Prime Minister Shehbaz Sharif’s administration advances its privatisation agenda, numerous companies, including Chinese firms, have submitted Statements of Qualifications (SoQs) in a bid to acquire majority shares in Pakistan International Airlines (PIA).
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.
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 revealed the names of the companies within these consortiums.
This development follows PM Shehbaz’s recent declaration that the government will proceed with the privatisation of all state-owned enterprises (SOEs), excluding strategic ones, irrespective of their financial status. Chairing a high-level meeting in Islamabad, he stated that all SOEs, whether profitable or loss-making, will be privatised except for those deemed strategic.
Pakistan, grappling with a severe economic crisis, agreed in June 2023 to reform loss-making SOEs as part of a $3 billion bailout deal with the International Monetary Fund (IMF). As of June last year, PIA had liabilities amounting to 785 billion Pakistani rupees ($2.81 billion) and accumulated losses of 713 billion rupees.
Earlier this month, the Securities and Exchange Commission of Pakistan (SECP) approved the legal segregation of PIA’s non-core assets and liabilities to PIA Holding Company Limited.
This scheme, effective from April 30, 2024, aims to facilitate the smooth listing of PIA Holding Company Limited on the Pakistan Stock Exchange (PSX), Central Depository Company (CDC), and National Clearing Company of Pakistan Limited (NCCPL), in accordance with applicable rules and regulations.
The Privatisation Commission is set to begin the pre-qualification process based on criteria outlined in the Request for Statements of Qualifications (RSOQs) as per the PC Ordinance 2000 and associated regulations. The privatisation process will move forward once potential bidders and investors are assessed and qualified.
These pre-qualified bidders will conduct thorough due diligence on PIA’s operations, finances, and other relevant aspects. Qualified parties will then receive the necessary documents and instructions to participate in the bidding process. A pre-bid conference will be held to address investors’ concerns and questions before they submit their bids.
Following this, the Privatisation Commission Board (PCB) and the Cabinet Committee on Privatisation (CCoP) will approve the valuation (reference price) for the sale of the majority stake in PIA. The actual bidding will take place afterward, with the PCB and CCoP reviewing and endorsing the results.
Finally, the successful bidder will be issued a Letter of Intent, indicating the government’s intention to proceed with the sale.
