Presently the government of Pakistan on Tuesday sold its 75 percent stakes in PIA (Pakistan International Airlines) for Rs10.1 billion cash to business tycoon Arif Habib-led consortium, marking the completion of the first major privatisation transaction in two decades through offloading the white elephant.
It is said that the consortium of Arif Habib, Fawad Ahmed Mukhtar, Gohar Ejaz and Aqeel Karim Dhedhi – Pakistan’s renowned businesspersons, placed the highest bid of Rs135 billion for the 75 percent shares in the 13th round of open auction. Sources recorded that Air Blue was disqualified for the open bidding after it offered Rs26.5 billion, which was nearly three-fourth less than the minimum price of Rs100 billion. Our government had set a very low minimum price, even as against to the last failed attempt when it asked for Rs85 billion for 60 percent shares when the entity had pessimistic equity.
Statistics showed that the government out of the Rs135 billion, will get Rs10 billion ($36 million) and the remaining amount will be invested in the country International Airlines (PIA) through the successful bidder. Since 2005 when the government of Pakistan had sold K-Electric, Pakistan’s largest power distribution company, It was the second attempt to sell the PIA in over one year and marks the first successful transaction. Prime Minister Shehbaz Sharif had desired that the PIA should be sold for Rs200 billion.
Furthermore, during the Cabinet Committee on Privatisation meeting, which accepted the minimum sale price, one of the cabinet ministers advocated selling PIA at any cost to get rid of the bleeding entity. The government of Pakistan took out Rs670 billion from the books of PIA, which will now be serviced by the taxpayers. For the current fiscal year, our government has estimated Rs35 billion in debt servicing cost, which will continue for at least 6 more years.