Govt seeks direct sale of PIA to foreign buyers after first auction fails

ISLAMABAD: Pakistan is once again looking to sell Pakistan International Airlines (PIA) after a failed auction attempt earlier this month, according to Bloomberg.

The government is now considering a direct sale to other countries or going through the privatization process.

In the previous attempt, for those unaware, the sole bid received was dismissed as it fell significantly short, offering just 8.5 times below the minimum asking price.

Prime Minister Shehbaz Sharif’s administration, as part of a $7 billion loan deal with the International Monetary Fund (IMF), is working to restructure or sell off loss-making state entities, like PIA, to reduce the financial burden on the country.

The airline has been unprofitable for nearly 20 years and survives on government bailouts.

In an effort to make the sale more attractive, the government may wipe out the airline’s debt in the next attempt. Previously, it transferred three-fourths of PIA’s total debt—about Rs830 billion ($3 billion)—to government accounts.

The airline had shortlisted six local groups for the auction, but only Blue World ended up placing a bid. Fly Jinnah, the local arm of Air Arabia, was also among the interested parties.

Pakistan has historically received financial support from close allies like the UAE, Saudi Arabia, Qatar, and China.

In addition to PIA, the government is also looking into options for the privatization of the Roosevelt Hotel in New York, which is owned by Pakistan. A special committee has been formed to explore different transaction possibilities.

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