The government plans to hold a final auction for the state-owned Pakistan International Airlines (PIA) in the first week of October. All issues related to the privatization of the national air carrier, including outstanding commercial loans, are expected to be resolved within a couple of weeks.
In June, the government announced that six companies had been qualified to bid for PIA from a pool of eight after receiving expressions of interest. Pakistan aims to sell more than 51 percent of its stake in the loss-making airline as part of economic reforms recommended by the International Monetary Fund (IMF) for a new $7 billion loan program.
However, the country’s central bank recently refused to grant a waiver or exemption to prospective buyers concerning PIA’s commercial bank loans of Rs268 billion ($971.1 million) and other financial guarantees in dollar terms, posing a challenge to the privatization effort.
“It has been mutually decided with the pre-qualified bidders to hold the final auction for PIA in the first week of October,” said Dr. Ahsan Ishaq, a spokesperson for the privatization ministry. “We have been in touch with the central bank to resolve the issue regarding all outstanding commercial loans of the national carrier before the final bid.”
The pre-qualified bidders for PIA include Air Blue, Arif Habib Corporation, Blue World City, Fly Jinnah, Pak Ethanol (Pvt) Consortium, and YB Holdings Consortium. The government initially planned to finalize the deal by August 14, Pakistan’s Independence Day, but it was delayed due to bidders requesting more time to review the airline’s latest audited accounts, aircraft lease agreements, and clarity on flights to Europe, which are currently banned.
