Islamabad:
Pakistan’s richest and well -connected business groups with interests in cement, power, fertilizers and real estate sectors have shown interest in acquiring the loss -making Pakistan International Airlines, which increases the prospects of success with the second attempt to privatize the unit.
The country’s leading business groups, the lucky cement, ARIF Habib -Konglomerate and Navp power have come to offer the acquisition of a majority of the efforts of Pakistan International Airline. Among the interested parties are Fauji Fertilizer Company, the military’s commercial venture and the Bahria Foundation, owned by Pakistan Navy.
According to a declaration of the Privatization Commission on Thursday, five parties submitted to both interests and the qualifying declaration until the extended period.
Most of these parties are resourceful and have real connections and travel prospects for a healthy competition.
Our goal is to pass Pia to a consortium, which can make it a truly global profitable organization, said Muhammad Ali, adviser to prime minister on privatization on Thursday.
The Privatization Commission had invited the expression of interests in the disposal of 51 to 100 % share capital in PIACL together with management control. It is the second attempt to privatize the airline after the first bid failed last year.
The Commission said eight parties had shown interest, but five of them submitted the qualification declaration. AKD group, Habib Rafique Engineering and Sardar Muhammad Ashraf D. Baloch (Pvt.) Limited did not present the statement of qualifications.
The Commission also stated that among the parties submitting both mandatory documents, the consortium is consisting of Lucky Cement Limited, Hub Power Holdings Limited, Kohat Cement Company Limited and Metro Ventures (Private) Limited. This consortium includes some of the richer business individuals.
The second consortium includes ARIF Habib Corporation Limited, Fatima Fertilizer Company Limited, City Schools (Private) Limited and Lake City Holdings (Private) Limited.
Fauji fertilizer company Limited has also submitted documents after months of speculation that the military’s commercial venture was eager to acquire the airline.
The other two parties are air blue and a consortium consisting of Augment Securities & Investments (Private) Limited and Serene Air (Private) Limited, Bahria Foundation, Mega C&S Holding, Equitas Capital LLC.
The SOQs submitted by the parties will be evaluated by the Privatization Commission against the pre -qualification criteria and the pre -qualified parties will continue to the next step where they access the virtual data room to implement the shopping page, according to the Privatization Commission’s privatization.
Muhammad Ali said that Pia’s balance and the smallest reserve price due to improved economy and other development would be revised.
During the last attempt, the government had set the minimum price of RS85.03 billion with RS45 billion negative balance. Now the government has taken several debts from the balance, which should have a positive impact on the minimum price.
Pia’s bid is now expected to take place in the last quarter (October-December) this year, said Muhammad Ali, adviser to the Prime Minister on privatization.
The first attempt to privatize Pia last October failed because the government ended up with only one bidder. Two other bidders supported due to discrepancies on tax exemptions and clearing the remaining balance.
Prime Minister Shehbaz Sharif’s government has been unable to privatize a single entity during the first year of power. The government has again set a very modest goal of generating RS85 billion from the privatization proceeds in the next financial year.
The International Monetary Fund has enabled Pakistan to waive 18% turnover tax on the lease of the aircraft and take RS45 billion obligations from the Pia balance before its privatization. The opening of European routes is considered as major incentives for success with the second bid for privatization, though the United Kingdom’s Rut still remains closed.
The privatization adviser said the Commission was satisfied with the interest and seriousness shown by the potential bidders. He said that all the outstanding problems would be resolved and that the transaction is expected to be closed within this calendar year.
