Bids Invited for PIA Privatisation

[Abbas Ali]

Sole bidder Blue World City consortium given 30 minutes to match minimum expectation price set by Privatization Commission for PIA.



PKR 10 billion offered as bid price for PIA by Blue World City consortium.



PKR 85,030 million (PKR 85.03 billion) is the minimum expectation price set by Privatization Commission (PC) for PIA.

Abbas

[Abbas Ali]

After given 30 minutes to reconsider its bid offer, Blue World City consortium decided to keep its bid offer at PKR 10 billion. The bid offer was based on the assessment of PIA, said Blue World City consortium.



The offer failed to meet PKR 85,030 million (PKR 85.03 billion) set as the minimum expectation price by Privatization Commission (PC) for PIA.

Blue World City consortium wished all the best and good luck for PIA.

Abbas

[TomcatTask]

Do note that none of the privatization secretaries nor Federal minister for privatization attended the event, fairly evident that nothing was going to come out from the get go.

[Sami Warsi]

It will handover to political influencer as per prediction

[Abbas Ali]

CCoP Endorses Reference Price for Divestment of PIA shares

On October 31, Cabinet Committee on Privatization (CCoP) endorsed the reference price as recommended by the Privatization Commission (PC) Board for divestment of 60% shares of Pakistan International Airlines Corporation Limited (PIACL) subject to terms and conditions of the bidding document.

Deputy Prime Minister and Foreign Minister Mohammad Ishaq Dar who is in Doha with Prime Minister Shehbaz Sharif, chaired the meeting of Cabinet Committee on Privatization (CCoP) via zoom.

Ministers of Finance, Privatization, Power (by zoom) and Industries, federal secretaries and senior officers of various Ministries also attended the meeting.

[Abbas Ali]

Pakistan's federal cabinet is expected to discuss PKR 10 billion bid offer for PIA made by Blue World City consortium.

Blue World City consortium says they'll start their own airline in case their offer is not accepted.

https://www.reuters.com/business/aerosp ... 024-10-31/

[faisal-777]

Gov should back off from the condition of employees being retained. then other 5 bidders would surely change their minds.

[Hassan777]

Gov should back off from the condition of employees being retained. then other 5 bidders would surely change their minds.

Employees aren’t even the main point of contention, its 100% stake that the bidders required. The government also set a condition that for 18 months the buyer cannot change the management. No sane company will touch this deal unless these conditions are changed by the government.

[Amaad Lone]

PIA 60% reserve price was 85 billion rupees, or if someone was to buy 100% the price would be around 142 billion rupees.

202 billion rupees of loans retained by PIA.
142 billion rupees paid to government of Pakistan
40 billion rupees due in employees pensions
20 billion rupees due to FBR in taxes.

404 billion rupees worth of investment for an airline with 16 operational planes and no routes to Europe, UK, USA.

1.45 billion dollars is what the government thinks PIA is worth.

It should be call Joke Comisson of Pakistan.

[Abbas Ali]

Government of Khyber Pakhtunkhwa has shown interest in participating in bidding process for PIA privatization.

Text of letter to Privatization Minister Abdul Aleem Khan by Khyber Pakhtunkhwa Board of Investment & Trade (KP-BOIT) Vice Chairman Hassan Masood Kunwar.

"Dear Sir,

The Board of Investment and Trade Khyber Pakhtunkhwa extends its warmest regards to your esteemed office. On behalf of the Chief Minister/ Chairman and the people of Khyber Pakhtunkhwa, we would like to express our earnest interest in participating in the bidding process for the sale of Pakistan International Airlines (PIA). This letter serves as our formal intent to position the Government of Khyber Pakhtunkhwa as a competitive bidder in this strategic acquisition

As Pakistan's National Flag Carrier, PIA represents a critical asset for the nation, symbolizing our national identity and pride. Recognizing the importance of retaining PIA within the national fold, the Chief Minister has directed us to actively pursue this acquisition to ensure the airline remains under the control of the Government of Pakistan rather than transferring to any private or foreign-backed entity. In line with this commitment, we are prepared to offer a bid that will surpass the current highest offer of PKR 10 Billion by Blue World Consortium, ensuring a strong and competitive position within this process.

We respectfully request that the Government of Khyber Pakhtunkhwa's proposal be considered as a viable option to retain the National Flag Carrier within a provincial government structure, preserving PIA's legacy and aligning with the public's interest in maintaining national assets. Further, we would be honored, if afforded, an immediate opportunity to meet with your team to present our proposal in detail, discuss our strategic vision for PIA, and elaborate on our capacity to meet and exceed the highest bids.

Please let us know a convenient time for this engagement, as we are prepared to act swiftly and decisively in our pursuit of this vital national interest.

Thank you for considering our proposal. We look forward to your positive response and the opportunity to serve Pakistan in this significant undertaking."



Abbas

[Abbas Ali]

Clarification

Gerry’s International applied as a single party against the Invitation for the Expression of Interest published internationally by the Privatization Commission for divestment of Pakistan International Airlines Corporation Limited (PIACL).

Gerry’s International provided a list of its subsidiaries to meet the pre-qualification criteria of PKR 200 billion in annual revenues. Gerry’s Dnata was listed as one of the 10 subsidiaries of Gerry’s International. However, the combined annual revenues of the 10 subsidiaries of Gerry’s International did not meet the pre-qualification requirement of PKR 200 billion in annual revenues and hence Gerry’s International was not pre-qualified.

Press Release

[Sami Warsi]

All formalities were scripted, Nawaz Sharif directed Maryam Nawaz to acquire PIA.

Now Lahore will be new hub and karachi will completely ignore as aviation hub.

[arshad.altaf]

After KP, Punjab also jumps on PIA bandwagon

LAHORE: A day after the Khyber Pakhtunkhwa government said it was ready to purchase the Pakistan International Airlines (PIA), the Punjab government led by Chief Minister Maryam Nawaz on Saturday followed suit, expressing its interest in either acquiring the national carrier or establishing a new airline.

PML-N President Nawaz Sharif stated on Saturday that Chief Mini­s­ter Mar­yam Nawaz had sought his counsel on whe­ther the Punjab government should acquire the PIA or establish a new airline. “Mar­yam proposed that the Punjab government launch a new airline, Air Punjab, and I advised her to proceed with further consultations on the potential acquisition of the PIA,” Nawaz Sharif told reporters in New York.

“We could introduce a new airline that would offer direct flights from Karachi, Lahore, Pesha­war, and Quetta to New York, along with services to London, Tokyo, Hong Kong, and other international destinations,” the elder Sharif elaborated. He said the proposal was under consideration.

Nawaz Sharif also suggested that the PIA could be purchased and rebra­nded by the provincial government as Air Punjab.

Full news piece: https://www.dawn.com/news/1869474/after ... -bandwagon

[arshad.altaf]

KP’s surprise move to acquire PIA raises eyebrows

PESHAWAR: The Khyber Pakhtun­khwa government’s offer to acquire the struggling Pakistan International Airli­nes (PIA) has sparked debate over whe­ther this is a genuine acquisition bid or an attempt to ‘troll’ the federal government.

https://www.dawn.com/news/1869479/kps-s ... s-eyebrows

[TomcatTask]

Miftah Ismail made a nice tweet outlining the issues which lead to this, sharing here.

Further to my tweet on the failure of PIA’s privatisation

From what I hear, these were the issues the Privatisation Commission(PC) and the bidders were discussing when credible bidders decided to walk away:

1) PC wanted govt directors to have a final say in all major decisions, in spite the fact that govt would only be a minority stakeholders. The bidders didn’t agree to this.

2) The bidders pointed out that there was still a hole of Rs 45 billion in the balance sheet and they wanted the govt to transfer this to the PIA holding company. The PC said no. This had to do with PIA’s historic dues to the Civil Aviation Authority and tax authorities.

3) The bidders thought that besides the above Rs 45 billion hole, the govt was over-valuing PIA assets in the balance sheet. The bidders estimated that it would take at least a $150 million to make the PIA-owned grounded aircraft airworthy.

4) PIA has never been able to return a single leased aircraft back to the lessor. The lease requires that the aircraft be returned in the same condition that it was acquired in. PIA has always ended by buying the aircraft back from the lessor rather than trying to put the aircraft back in its original condition. Buyers estimated that it would cost about $10 million to bring each leaders aircraft in the right shape to return it (or they’d have to buy it). This was a future liability buyers were mindful of.

5) Our Civil Aviation Authority is not considered a “fit and proper” regulatory agency by most western aviation authorities since the statements issued by Ghulam Sarwar Khan, the former PTI’s minister of Aviation. This means flights to US and Europe are not guaranteed until and unless CAA is reformed and restructured. This could take many months or years. This was a big risk in buyers minds.

6) PC or its bosses were not willing to accept that PIA is not a viable business and the onus was on the government to make tough decisions to cut its losses and give its new owner a chance to turn PIA into a serious international airline. They were rather trying to out-smart the investors. In the end our smart PC and CCoP now get to keep PIA and its holding company and incur losses of over Rs 10 billion every month (the value of the only bid they received).

Link to the tweet: https://x.com/MiftahIsmail/status/1852995459066761698