ISLAMABAD:
The government is set to auction a 75% stake in Pakistan International Airlines on Tuesday in Islamabad, marking a significant step towards the airline’s privatisation. The successful bidder will have 90 days to purchase the remaining 25% of the shares.
According to Privatization Commission sources, the potential new investor is required to commit to an investment of Rs80 billion over the next five years. Of the proceeds from the sale of 75% of PIA’s shares, 92.5% will be allocated to the airline for reinvestment, while the remaining 7.5% will be transferred to the state.
The board of the Privatization Commission will first approve the reserve price, after which the Cabinet Committee on Privatization will give final approval. Pre-qualified bidder groups must submit their bids between 10.45 and 11.15 on Tuesdays. The sealed bids will be publicly opened at 15.30 in the presence of the media.
If a bid exceeds the minimum price, it will be opened. In the event of a lower bid, the highest bidder will have the opportunity to match the price. Once the successful bidder is identified, the bidder has 90 days to purchase the remaining 25% of the shares.
In a move to protect PIA’s workforce, the Privatization Commission has stated that the job security of employees will be guaranteed for a year. In addition, the holding company will be responsible for administering pension schemes and post-retirement benefits.
Earlier, the government had decided to sell its 100% stake in PIA, but a quarter of the shares will only be offered to the winning bidder at a 12% premium to the bid price, with an option to make the payment a year later.
The government also decided to take only 7.5% of the bid money in cash, while the bidder will invest the remaining 92.5% in the PIA company instead of depositing it in the treasury, government officials said. Express Pakinomist. During the last unsuccessful attempt, the bidder had the option of paying 15% of the bid money in cash.
The decision to offload a 100% stake had been taken after bidders sought no role for the government in PIA’s affairs once the successful bid takes place on December 23, according to Privatization Commission officials.
