ISLAMABAD (Speaks)- The privatization of Pakistan International Airlines has hit a critical stage, with the Arif Habib consortium emerging as the victorious bidder, obtaining a 75% interest in the national airline with a final offer of Rs135 billion.
The decision was revealed following the completion of the second and last phase of bidding, which was overseen by the Privatisation Commission in Islamabad. The procedure, which was televised live, was attended by Federal Minister of Finance Muhammad Aurangzeb, the Ministers of Information and Privatisation, top government officials, and representatives of the bidding consortia.
The last round of bidding began with a base price of Rs115 billion. During an aggressive sequence of additional offers, Lucky Cement increased its bid to Rs115.5 billion, causing Arif Habib to reply with Rs116. The bidding proceeded, with both parties continuously raising their bids, with Lucky Cement rising to Rs116.75 billion and then to Rs120.25 billion. Before the session ended, Arif Habib increased its proposal to Rs121 billion and eventually won the battle with a final offer of Rs135 billion, topping Lucky Cement’s last bid of Rs134 billion.
Three pre-qualified bidders had already filed sealed bids for the airline during the first round of the privatization process. Arif Habib and Lucky Cement made bids that exceeded the government’s reference price of Rs100 billion, while Air Blue (Private) Limited offered Rs26.5 billion. The bids were opened at 3:30pm, and the Privatisation Commission Board assessed the reserve price before moving on with the procedure.
Chairman of the Privatisation Commission, Muhammad Ali, acknowledged that the reserve price was kept private throughout the bidding process and needed permission from both the commission’s board and the Cabinet Committee on Privatization. He praised the sale as a significant milestone, pointing out that Pakistan has not executed a large-scale privatization deal in over two decades.
According to authorities, the agreement structure requires that 92.5% of the offer value be poured directly into PIA to assist its operations and reorganization, with the remaining 7.5% going to the federal government. The winning bidder will get management control through a 75% stake, with the option to purchase the remaining portion at a later point.
The sale is Pakistan’s second attempt to privatize the once-flagship airline, following a failed effort last year that crumbled due to a single low bid. Since then, the government has inherited a major chunk of PIA’s historical debt, and the airline has declared a return to pre-tax profitability after more than two decades. The easing of flying prohibitions imposed by the United Kingdom and the European Union has further boosted the carrier’s prospects.
Officials participating in the process think that bringing in private funds and expert management will help to stabilize PIA’s finances and enhance operational performance as the transaction progresses toward regulatory clearances and official ownership transfer.