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Govt Rejects Rs10bn Bid for PIA Stake, Eyes Alternate Options for Privatisation
CCOP rejects Rs10B bid for 60% stake in PIA, citing it’s below the Rs85B minimum price. Govt committed to privatising the airline through other channels.
ND
by News Desk
2024-11-15
Govt Rejects Rs10bn Bid for PIA Stake, Eyes Alternate Options for Privatisation

The Cabinet Committee on Privatisation (CCOP) has turned down a Rs10 billion bid from the sole contender, Blue World City, for a 60% stake in Pakistan International Airlines Corporation Limited (PIACL), highlighting the offer as significantly below expectations.

The Privatisation Commission (PC) had earlier rejected the bid and referred the matter to the CCOP for further review.

Below-Par Bid

Last month, the bidding process for PIA’s 60% stake attracted only one bidder, Blue World City, which proposed Rs10bn against the government’s minimum target of Rs85bn. Although the consortium was given additional time to reconsider its bid, Blue World City refused to revise its offer.

“The CCOP reiterated the resolve of the government to divest PIACL through privatisation or G2G [government-to-government] mode,” read a statement from the deputy prime minister’s office following Thursday's meeting, chaired by Ishaq Dar.

Financial Health of PIA

Despite the setback, the CCOP noted the positive financial assessment of PIA presented by the aviation division. This suggests the government remains optimistic about finding suitable options for the airline’s privatisation.

Future Strategies

The CCOP has also formed a committee, led by the Minister of State for Finance, to explore transaction options for PIA’s Roosevelt Hotel in New York. Leased to the NYC Administration for $220 million last year, the property’s sale or lease will be assessed in line with legal provisions.

Additionally, the committee instructed the resolution of all pending issues related to the Services International Hotel sale before its next meeting.

What Lies Ahead

While the government rejected the bid as “unsatisfactory,” it affirmed its commitment to privatise PIA, whether through the private sector or bilateral agreements with other governments.

The rejection underscores the challenges Pakistan faces in meeting privatisation goals while balancing financial expectations and investor interest.
Tagged:

PIA

PakistanEconomy

IshaqDar

Privatisation
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