75% of PIA Shares Privatised: Who Is the New Owner?

News Desk 

Islamabad: The Pakistan government on Tuesday concluded the long-delayed privatisation of Pakistan International Airlines (PIA), selling a 75% stake in the loss-making national carrier for Rs135 billion to the Arif Habib consortium.

The successful consortium comprises Arif Habib Corporation Limited, Fatima Fertiliser Company Limited, City Schools (Private) Limited, and Lake City Holdings (Private) Limited. The deal marks a major step in the government’s efforts to reform state-owned enterprises and meet targets under the International Monetary Fund (IMF) programme.

The transaction followed a competitive two-round auction overseen by the Privatisation Commission. Three consortia submitted sealed bids, with two exceeding the government’s minimum expected price of Rs100 billion, triggering an open auction.

In the first round, the Arif Habib consortium offered Rs115 billion, the Lucky consortium bid Rs101.5 billion, while the Air Blue consortium submitted a bid of Rs26.5 billion. As only the Arif Habib and Lucky consortia crossed the reference price, the process moved into a second round with a base price of Rs100 billion.

Pakistan Sells 75% Stake in PIA for Rs135 Billion to Arif Habib Consortium

Arif Habib beat Lucky consortium with a Rs135bn final bid.

92.5% of proceeds to go into the airline; government retains 25%.

Sale aligns with IMF-backed economic reforms after years of losses.

During the final bidding, the Arif Habib consortium secured the deal with an offer of Rs135 billion, narrowly beating the Lucky consortium, which placed a final bid of Rs134 billion. The Lucky consortium congratulated the winning bidder after the auction concluded.

The bid opening, originally scheduled for 3:30pm, was delayed and began at 4:30pm in the presence of media representatives. Privatisation Commission Chairman Muhammad Ali said the process was conducted transparently and in line with established rules. “If more than one bid is higher than the reference price, then there will be an open auction,” he had stated earlier.

According to the Privatisation Commission, 92.5% of the proceeds from the 75% stake sale will be injected into PIA, while 7.5% will go to the government. The government will retain a 25% shareholding, with the successful bidder given the option to acquire it at a later stage.

Business observers described the sale as a critical test of the government’s reform agenda. Business leader Dr Gohar Ejaz noted that PIA has incurred losses of around Rs800 billion over the past two decades, stressing the need for the new owners to restore the airline’s performance. Ali Khizar, Director Research at Business Recorder, said the process hinged on balancing political and commercial considerations around the reserve price.

The privatisation attracted strong interest after earlier attempts failed. Last year, the process collapsed when Blue World City consortium, the sole bidder at the time, refused to meet the minimum price. The government relaunched the sale process in April with a fresh call for expressions of interest.

The Privatisation Commission said the PIA fleet, currently consisting of 18 aircraft, is projected to double within three to four years under the airline’s business plan.

“The privatisation of PIA is being undertaken as part of Prime Minister Shehbaz Sharif’s economic reform agenda,” the commission said, reiterating the government’s commitment to a credible and transparent process. In put from the Business Recorder website.