Pakistan's bid to privatise debt-ridden airline gets offer of just $36 million
Pakistan International Airlines has around 7,100 employees, with over 2,400 working on a daily wage basis
Pakistan's efforts to privatise its national airline received a major jolt as the lone bidder offered just PKR 10 billion ( ₹30.25 crore) for a 60 per cent stake. According to a PTI report, the offer is below the Shehbaz Sharif government-set minimum prize of PKR 85 billion.
The bidding ceremony to sell the Pakistan International Airlines (PIA) was held at a hotel in Islamabad and shown live on the state-run PTV channel.
The move to sell the PIA and other loss-making state-owned enterprises is part of the deal with the International Monetary Fund (IMF) that recently agreed to provide $7 billion to Pakistan.
The Pakistan government had pre-qualified six groups in June, but only a real-estate development company, Blue World City, participated in the final bidding process, the PTI report added.
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The Privatisation Commission said it had asked the bidder to match the minimum bid.
Blue World City chairman Saad Nazir, said,“We wish the government all the best if they don’t want to accept our bid."
According to a Bloomberg report, Nazir is planning to bring in Chinese and Turkish investors that have expertise in aviation.
Islamabad was looking to offload a 51-100 per cent stake in debt-ridden PIA to raise funds and reform state-owned enterprises but the bid showed that the process may be a non-starter.
PIA's owned assets are worth approximately PKR 152 billion, including aircraft and operational routes.
PIA owes billions of rupees in debt
But the Pakistan national air carrier has around 7,100 employees, with over 2,400 working on a daily wage basis, a hindrance in its privatisation.
PIA is making losses, owes billions of rupees in debt and its fleet is aging and any investor would have to make substantial investment to make it a profit-making entity, experts from the sector said.
The Pakistan International Airlines is banned to operate flights to the European Union since 2020 over concerns that some pilots held fake licenses.
(With PTI, Bloomberg inputs)
