PIA privatisation moves ahead as four investors pre-qualify

ISLAMABAD: Pakistan’s push to privatize its national airline and overseas assets gathered pace on Tuesday as the Privatisation Commission (PC) prequalified four potential investors for Pakistan International Airlines (PIA) and the Cabinet Committee on Privatisation (CCOP) approved a joint venture (J/V) model for the Roosevelt Hotel in New York.

At its meeting, chaired by Muhammad Ali, Adviser to the Prime Minister on Privatisation, the Privatisation Commission Board approved the prequalification of four interested parties for the partial divestment of Pakistan International Airlines Corporation Limited (PIACL). The decision followed a detailed evaluation of Statements of Qualification (SoQs) submitted by five prospective bidders, assessed against technical, financial, and documentary criteria.

The four prequalified groups include two consortia: one comprising Lucky Cement Limited, Hub Power Holdings, Kohat Cement Company, and Metro Ventures; the other made up of Arif Habib Corporation, Fatima Fertilizer, City Schools, and Lake City Holdings. The remaining two prequalified bidders are Fauji Fertilizer Company and Air Blue (Pvt.) Limited. These entities will now proceed to the buy-side due diligence phase—a critical next step in the competitive and transparent privatization process of the national carrier.

The government is confident that PIA privatisation will succeed this time, aided by key waivers from the International Monetary Fund, a stronger balance sheet, and a streamlined transaction structure. On June 28, Ali while speaking on Geo News, said previous efforts stalled due to the IMF’s refusal to grant critical exemptions, particularly on GST for aircraft and equipment— approvals that are now in place. He noted PIA’s equity, once negative Rs45 billion, with liabilities like Rs17 billion owed to the FBR and other dues shifted to a holding company in line with investor demands.

Meanwhile, in a separate development, the CCOP approved the transaction structure for the Roosevelt Hotel, endorsing a joint venture (J/V) model as proposed by the Privatisation Commission Board.

The decision came after evaluating three options presented by Financial Advisory Consortium led by Jones Lang LaSalle Americas Inc. (JLL): an outright sale, a long-term lease, and a joint venture with multiple strategic possibilities.

The joint venture model was selected for its ability to maximize long-term value, provide flexibility, offer multiple exit strategies, and reduce future fiscal exposure.