Arif Habib consortium forms SPV to acquire full ownership of PIA

The Arif Habib-led consortium has established a special purpose vehicle (SPV), PIA Equity Limited (PIAEL), to acquire 100% ownership of Pakistan International Airlines (PAI) and has submitted a notice of intent backed by a standby letter of credit to exercise its call option for the remaining 25% stake, according to the Privatisation Commission.

The move advances the privatisation process of the national carrier, with the government aiming to complete the transfer of management by May 25 under the share purchase agreement.

The consortium includes Arif Habib Corporation, Fauji Fertilizer, Fatima Fertilizer, Lake City Holdings, AKD Group and The City School. The transaction received approval from the Competition Commission of Pakistan following a Phase I review under the Competition Act, 2010.

Officials said the consortium is working with the Privatisation Commission to complete the acquisition as part of the government’s broader privatisation programme aimed at reducing reliance on state support and restructuring the airline.

The development follows a missed Rs83 billion payment deadline under earlier terms, although the process has continued under the revised structure.

The transaction has drawn criticism from the People's Unity of PIA Employees, which questioned the valuation and sale structure in a white paper. The report stated that PIA, which recorded a Rs26 billion profit in 2024, is being transferred for Rs10 billion in upfront cash while liabilities exceeding Rs650 billion remain with the public sector.

The report cited total assets of Rs187.3 billion, along with international route rights, airport slots and real estate holdings, arguing that these exceed the cash component of the deal.

Under the full ownership structure, the transaction is valued at approximately Rs180 billion, including Rs55 billion in government proceeds and Rs125 billion earmarked for equity injections to support fleet expansion and restructuring.