Privatization plans moving quickly - PIA sale aimed for year-end, says official
Assalamu alaikum - Pakistan’s privatization chief Muhammad Ali said on Monday the government is aiming to complete the sale of Pakistan International Airlines (PIA) by the end of this year, as part of a broad privatization push backed by what he described as strong commitment from top leadership.
He said the move to privatize the loss-making PIA is intended to raise funds and reform state enterprises in line with conditions tied to the $7 billion IMF program agreed last year. A previous attempt collapsed after a bidder reportedly offered $36 million for a 60% stake, well below the roughly $303 million valuation the government sought.
In July, the government prequalified four investor groups for PIA. One bidder is a consortium of major firms including Lucky Cement, Hub Power, Kohat Cement and Metro Ventures. Another is led by Arif Habib Corp. and includes Fatima Fertilizer, The City School and Lake City Holdings. Fauji Fertilizer and private carrier Airblue have also been cleared to bid.
“We are targeting to privatize PIA before the end of the year,” Ali told reporters, flanked by the finance minister and other economic officials.
He said the government is moving quickly and has engaged sector specialists, lawyers, M&A experts and investment bankers to help the transactions. Ali explained the privatization program was broken into three phases and that all phases have been completed, adding the team is working on multiple deals at once while taking market conditions and investor appetite into account.
“Keeping all these things in mind, we are working on privatization as fast as we can, at full speed,” he said.
Ali also noted the government sold First Women Bank to a UAE group for Rs5 billion (about $17.5 million), while its equity had been Rs3 billion (about $10.5 million). He said the privatization of the House Building Finance Corporation has been underway for two years and the government is in negotiated talks with a potential buyer.
On power distribution companies (DISCOs), Ali stressed caution because sales would affect every household. He said restructuring plans are in place to ensure continued supply, reduced load-shedding and reasonable tariffs.
Regarding Pakistan’s Roosevelt Hotel in New York, the adviser Jones Lang LaSalle stepped down over a conflict of interest. Ali said the government is appointing a new adviser and major global firms have shown interest in advising the sale, naming Citibank, Morgan Stanley, Cushman & Wakefield, CBRE and Newmark.
He clarified the government does not intend to sell major international airports in Karachi, Lahore and Islamabad, but is engaging private parties to manage them. “In Islamabad, we are talking to the UAE,” he said, “and in Karachi and Lahore we will go to bidding.”
JazakAllah khair for reading - will be interesting to see how these sales impact services and employment in the months ahead.
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