PIA privatisation process set to conclude next month

WEB DESK: The Privatisation Commission (PC) has announced plans to finalise the privatisation process of Pakistan International Airlines (PIA) by August 2024, marking a significant step in the government’s broader five-year Privatisation Programme.

EY Consulting LLC, Dubai, was appointed as the financial adviser for the divestment of PIA in November 2023. Following sell-side due diligence, the Federal Cabinet approved a legal segregation plan and transaction structure for PIA in February 2024.

In line with these decisions, the PC issued advertisements on April 2nd and 15th, 2024, inviting Expressions of Interest (EOI) for the acquisition of 51-100 per cent equity in PIACL, inclusive of management control.

By June 2024, the PC had pre-qualified six potential bidders to participate in the PIA privatisation process, which is now advancing with ongoing buy-side due diligence. The bidding phase is scheduled for August 2024, according to the Commission.

The government’s broader Privatisation Programme aims to reduce its footprint in the commercial sector over the next five years, targeting several profit-making State-Owned Enterprises (SOEs). Alongside PIA, entities such as HBFCL are also slated for privatisation within this timeframe.

In a recent meeting, the Cabinet Committee on Privatisation (CCoP) provisionally approved 24 entities for privatisation, while an additional 41 entities are under review by the Cabinet Committee on State-Owned Enterprises (CCoSoEs) for categorisation.

Entities not classified as Strategic or Essential SOEs will also be considered for inclusion in the privatisation programme. The initial phase of this programme focuses on ten SOEs, including PIACL, RHC, FWBL, HBFC, ZTBL, PECO, SEL, IESCO, FESCO, and GEPCO, all slated for privatisation within the next year.

The forthcoming privatisation of PIA stands as a pivotal initiative under Pakistan’s economic reform agenda, aiming to enhance efficiency and attract investment in the aviation sector.

Read next: PSX soars to historic high