Bids Invited for PIA Privatisation

[Abbas Ali]

Potential buyers of PIA have refused to make the guaranteed investment of USD 500 million and also declined to accept targets of increasing the aircraft fleet and flying on certain number of domestic and international routes.

https://tribune.com.pk/story/2494175/pi ... conditions

[Amaad Lone]

Might be better idea to shut down PIA and sell its assets.

Hangers, routes, planes, properties and see how much the government can make.

Fire all 10,000 employees.

[Karachi Aviator]

Potential buyers of PIA have refused to make the guaranteed investment of USD 500 million and also declined to accept targets of increasing the aircraft fleet and flying on certain number of domestic and international routes.

https://tribune.com.pk/story/2494175/pi ... conditions

It's a foolish approach by the government to keep these many demands. Just get rid of the airline unconditionally.

Ain't nobody investing 500 Million dollars in this white elephant. The airline is banned in EU, UK and US and cannot fly to other markets like Australia until the existing bans are lifted.

[Abbas Ali]

Local prospective buyers of PIA have demanded protection that is currently available to foreign investors under an act of parliament and have also sought complete exemption from taxes applicable to air travel, fuel and the lease of aircraft.

https://tribune.com.pk/story/2494407/pi ... protection

[Abbas Ali]

Aviation Minister Khawaja Asif said the privatization process of PIA would be completed at the end of October 2024.

https://www.brecorder.com/news/40321724 ... end-of-oct

[Amaad Lone]

How come the government has not come up with a figure for the airline transaction.

268 billion rupees is the debt on the PIA books.

What is the value of PIA assets after deducting the debt??

No amount has surfaced, how come????????

[Abbas Ali]

September 20, 2024 - A meeting of Privatization Commission Board was held in Islamabad today, under the Chairmanship of the Minister for Privatization/Chairman Privatization Commission Abdul Aleem Khan.

The board reviewed current status of PIA privatization and considered recommendations of the Financial Advisor with respect to the permitted changes under the terms of the Request for Statement of Qualification (RSOQ).

Privatization Commission had pre-qualified six bidders including Fly Jinnah, Consortium led by YB Holdings (Pvt.) Limited, Airblue Limited, Consortium led by Pak Ethanol (Pvt.) Limited, Arif Habib Corporation Limited and Blue World City.

The bidding for PIA is planned for October 1, 2024.

Press Release

[London Flyer]

I would imagine of these bidders only the YB Consortium would have the capital needed to do what needs to be done. Would require modernisation of not only the fleet but revenue management, supply chain, marketing, flight ops and network planning at a minimum. I’m sure that would need to a significant upfront investment. Given how large and successful the consortium businesses are, I’d hope they’d really focus on growth and profitability and bring in top management too

[Karachi Aviator]

Privatization Commission had pre-qualified six bidders including Fly Jinnah, Consortium led by YB Holdings (Pvt.) Limited, Airblue Limited, Consortium led by Pak Ethanol (Pvt.) Limited, Arif Habib Corporation Limited and Blue World City.

Flyjinnah wanting to acquire PIA is still understandable since they're backed by Air Arabia group but what's going on with Airblue? Why would they acquire PIA when they can literally invest the same amount of money and become a better and bigger airline than PIA.

[Amaad Lone]

The Pakistani company has done a big fraud with the shareholders of PIA.

The shares that were bought in PIA have now been moved to the PIA Holding Company, that basically as the 600 billion of debt and some properties. The company PIA is de-listed from the stock exchange and owned 100% by the government.

how is that fair???

[Abbas Ali]

Arrangement made for live media transmission of PIA privatization bidding process on October 1.

Six pre-qualified parties to take part in airline's bidding process. Reserve price for airline's bidding to be made public after the completion of bidding process.

Successful bidder will not be allowed to suspend PIA flights on any route without the permission of the Government of Pakistan.

https://jang.com.pk/news/1393966

The successful bidder will have to make an investment of around PKR 70 billion in PIA and increase the number of aircraft in airline's fleet from 18 to 45 in three years, according to news reports.

Abbas

[danyal77W]

from 18 active aircrafts or 32 (current fleet) to 45 total or total active aircrafts?

If it is 45 active aircrafts, this does not sound very doable given the state and affairs.

[Amaad Lone]

Why is the government not declaring the reserve price before the bidding??

With 250 billion debt on the balance sheet should the government not declare what it is planning to get from the airline.

This airline will go to the Zardari Group.

[Abbas Ali]

Foreign airlines teaming with pre-qualified bidders in PIA privatization process include:

Pegasus Airlines with consortium led by YB Holdings (consortium members include Pioneer Cement, Artistic Milliners, ANS Capital, Metro Ventures)

AirAsia with consortium led by Pak Ethanol (consortium members include AirSial, Serene Air, Liberty Daharki Power Limited)

Air Arabia with pre-qualified bidder Fly Jinnah (FJ)

On September 25, the draft agreement would be signed and by September 27 earnest money will be deposited by pre-qualified bidders. Final draft bid document was uploaded on Virtual Data Room (VDR) on September 18.

Pre-qualified bidders have conducted site visits to PIA facilities in Karachi in late June, followed by a series of pre-bid meetings in July, August and September. These steps are part of a meticulous process leading up to the final financial bidding expected to be held on October 1, which will include live streaming to ensure transparency.

The auction will begin from the minimum price of PKR 45 billion, which is the current negative equity of the airline and will be the responsibility of the new buyer.

The government had offered 51% to 100% stake in the airline. It has now been decided to sell 60% shares.

The government has not accepted the bidders' demand for reduction in duties and taxes and give a 10-year waiver from any new tax.

In the first year, the winning bidder will need to inject PKR 65 to 70 billion to cover various expenses including cost of bringing grounded aircraft back into service.

The buyer would also have to pay sales tax on the new and leased aircraft.

The final terms that have been shared with the buyers include commitments to increase the size of the aircraft fleet from the existing 18 planes to 40 to 45 in three to five years. New buyers would have to reduce the average age of the existing fleet from 17 years to 10 years in the next five years. This would require the induction of new aircraft.

Info source:

https://tribune.com.pk/story/2498508/pi ... r-on-oct-1
https://e.thenews.com.pk/detail?id=344709

[Karachi Aviator]

ISLAMABAD: The government has postponed financial bidding for the privatization of Pakistan International Airlines (PIA) by a month, moving the date from October 1 to October 31, 2024. Sources attribute the delay to low bidder interest and material unresolved disconnects, including unresolved court cases, fleet ageing and civil aviation issues

https://www.google.com/amp/s/www.thenew ... by-a-month