KARACHI: The shareholders of PIA Holding Company Limited have provided their consent to the sale of 75% shares in Pakistan International Airlines Corporation Limited. This marks a major milestone toward the long-awaited privatization of Pakistan’s flagship airline.
The transaction will be made via direct transfer of shares as well as dilution of current holdings. This was formally communicated by PIAHCL to the Pakistan Stock Exchange on Monday through a public notice.
Arif Habib Consortium Wins Big in Privatisation Bid
In addition to this, a consortium comprising Arif Habib Corporation was reported to have won the auction. The auction was broadcast live. The winning bid was Rs135 billion, compared to the government reserve price of Rs100 billion. The transaction is worth about $482 million.
The resolution made by the shareholders clearly indicates that the disposal process will be carried out through the sale of existing shares belonging to PIAHCL. It will also include the subscription of additional shares by PIA Equity Limited. It is noteworthy that the disposal of the remaining 25% equity interest in PIA may take place at a later stage. This will happen if the option held by PIA Equity Limited is exercised under the terms of the Share Purchase and Subscription Agreement.
Future of National Carrier Set for Major Change
Further to this, PIAHCL was created with the sole purpose of managing the airline’s assets and liabilities during this transition. It is majority owned by the Government of Pakistan. Upon completion, the privatization is expected to attract fresh capital and new management to the country’s aviation industry.
This decision has been positively received by the Competition Commission of Pakistan. It is expected to support the development of a more efficient and competitive airline industry. Many believe that this reorganization will help reduce financial pressure on the national exchequer.
The approval marks the beginning of what could become the largest privatization deal in recent Pakistani history. The main priority now is to complete the remaining formalities. This will allow the new management to take over responsibility for the airline.
