PIA privatisation nears close, govt eyes Rs45 billion from remaining 25% stake

The federal government expects to complete the financial close of Pakistan International Airlines’ (PIA) privatisation by the end of April, with plans to generate around Rs45 billion from the sale of the remaining 25% stake.

Privatisation officials informed the Senate Standing Committee on Privatisation that total proceeds from the transaction are projected to reach approximately Rs55 billion.

The committee was briefed that a consortium led by Arif Habib has already initiated the process of hiring a new chief executive and management team for the airline.

According to the Privatisation Commission, the consortium has established a new company, PIA Equity Limited, which will include all shareholders participating in the acquisition. Fauji Fertiliser Company is also expected to join the consortium after approval from the federal cabinet committee.

Officials said most conditions for the transaction have been completed, with two working groups overseeing the remaining requirements and reporting to a central steering committee.

The government maintained that the airline was not sold below its value. Before privatisation, PIA’s net asset value stood at around Rs9 billion, which was later revised upward after revaluation of assets. Liabilities of approximately Rs125 billion have been transferred as part of the restructuring.

The committee was also informed that assets held by the PIA Holding Company are valued at about Rs12 billion, while outstanding liabilities of around Rs180 billion have been shifted to the holding entity.

In terms of financial performance, officials said PIA reported a profit of Rs7.3 billion during 2024, while a profit figure of Rs26 billion has been submitted to the Securities and Exchange Commission of Pakistan.

The meeting also reviewed employee-related matters, including medical facilities for pensioners. PIA currently has around 16,500 pensioners, of whom about 12,500 are active beneficiaries.

Officials said proposals from the State Life Insurance Corporation for providing medical insurance to retired employees have been approved, with arrangements under way with hospitals across the country.

Members of the committee raised questions regarding the airline’s assets, the privatisation process and tax concessions on aircraft purchases, while also emphasising the need to improve welfare measures for former employees.

The committee also discussed the potential of Gwadar International Airport for regional traffic, citing its location near Middle Eastern and Central Asian markets.