Pakistan's state-run airline PIA sold

Arif Habib Investment Group, the country's leading investment firm, has won the auction to sell a majority stake in Pakistan International Airlines (PIA), the country's national carrier, with a bid of $482 million. The deal is seen as a major milestone in the government's plan to privatize long-lost state-owned enterprises.

PIA, which has been under criticism for years due to overstaffing, poor management and consistent financial losses, is currently suffering from a severe cash crunch. The sale process was completed at a time when the Pakistani government is busy dealing with a severe foreign exchange and liquidity crisis.

A total of three Pakistani companies participated in the auction, which was broadcast live on state television. Representatives of the participating companies submitted their financial proposals in a transparent box during multiple rounds of bidding, ensuring transparency in the entire process.

Arif Habib Investment Group emerged as the top bidder in the auction with a bid of 135 billion Pakistani rupees for a 75 percent stake in PIA. Under the terms of the deal, the company will also have the option to buy the remaining 25 percent in the coming months.

“It was very important to keep this privatization process completely transparent, as it is one of the biggest transactions in the history of Pakistan,” Prime Minister Shehbaz Sharif said in a televised cabinet meeting before the auction began.

The rival bidders included a consortium led by Lucky Cement, which offered 134 billion rupees, and private airline Air Blue, which offered a much lower bid of 26.5 billion rupees.

It is worth noting that a previous attempt to privatize PIA failed last year. At that time, only one bid was received, priced at just $36 million—far below the government’s expected $300 million to $305 million.

Before being delisted from the Pakistan Stock Exchange, PIA had earned $854 million in fiscal year 2022, but had to account for a net loss of $437 million during the same period.