Arif Habib purchases a 75% stake in Pakistan International Airlines for Rs135 billion.

ISLAMABAD (Today News): The Arif Habib group emerged as the winning bidder, securing a 75% stake in the national airline with a final offer of Rs135 billion, marking a turning point in the privatization of Pakistan International Airlines.

After the second and final round of bidding, which was supervised by the Privatization Commission in Islamabad, was concluded, the decision was made public. Federal Minister of Finance Muhammad Aurangzeb, the Ministers of Information and Privatization, senior government officials, and representatives of the bidding consortia attended the live-streamed process.

The starting price for the final round of bidding was Rs115 billion. Arif Habib responded with Rs116 after Lucky Cement raised its proposal to Rs115.5 billion after an aggressive series of further bids. Lucky Cement’s proposal increased to Rs116.75 billion and then to Rs120.25 billion as the bidding process continued, with both sides regularly upping their offers. Arif Habib raised their offer to Rs121 billion before the session closed, and it ultimately prevailed with a final offer of Rs135 billion, surpassing Lucky Cement’s last bid of Rs134 billion.

During the initial stage of the privatization process, three pre-qualified bidders had previously submitted sealed offers for the airline. Air Blue (Private) Limited submitted an offer of Rs26.5 billion, while Arif Habib and Lucky Cement topped the government’s reference price of Rs100 billion. Before proceeding with the process, the Privatization Commission Board evaluated the reserve price after the bids were opened at 3:30 p.m.

Muhammad Ali, the chairman of the Privatization Commission, admitted that the reserve price was kept confidential during the bidding process and required approval from the Cabinet Committee on Privatization as well as the commission’s board. Given that Pakistan hasn’t carried out a major privatization deal in more than 20 years, he hailed the sale as an important milestone.

Authorities claim that the deal structure mandates that PIA get 92.5% of the offer value directly to support its operations and restructuring, with the federal government receiving the remaining 7.5%. A 75% ownership will provide the winning bidder managerial authority, with the opportunity to buy the remaining half later.

Authorities claim that the deal structure mandates that PIA get 92.5% of the offer value directly to support its operations and restructuring, with the federal government receiving the remaining 7.5%. A 75% ownership will provide the winning bidder managerial authority, with the opportunity to buy the remaining half later.

After a botched attempt to privatization the once-flagship airline last year due to a single low offer, this sale represents Pakistan’s second attempt at doing so. Since then, PIA has reported a return to pre-tax profitability after more than 20 years, and the government has inherited a significant portion of the airline’s past debt. The prospects of the carrier have been further enhanced by the relaxation of flight restrictions imposed by the European Union and the United Kingdom.

As the transaction moves toward regulatory clearances and official ownership transfer, those involved believe that bringing in private cash and professional management will assist to stabilize PIA’s finances and improve operational performance.