Pakistan’s Debt-Ridden Airline Receives $36 Million Offer Amid Privatization Bid

Pakistan’s Debt-Ridden Airline Receives $36 Million: Pakistan’s attempt to privatise its national airline hit a roadblock as the only bidder offered just PKR 10 billion for 60% stake. According to a PTI report, the offer is less than the minimum price of PKR 85 billion set by the Shehbaz Sharif government.

The bidding for Pakistan International Airlines (PIA) was held at a hotel in Islamabad and was live on PTV.

Also Read: Tragic Diwali: Man Fatally Shot in Front of Son During Delhi Celebration, Caught on CCTV

Selling PIA and other loss making state owned enterprises is part of the deal with IMF which has given Pakistan $7 billion.

The government had shortlisted six groups in June but only a real estate development company Blue World City participated in the bidding process, PTI reported.

The Privatisation Commission asked the bidder to match the minimum bid.

Blue World City chairman Saad Nazir, said,“We wish the government all the best if they don’t want to accept our bid."

Also Read: Bhai Dooj 2024: Date, Tilak Muhurat, Traditions, and Significance Explained

According to Bloomberg, Nazir is planning to bring in Chinese and Turkish investors who have experience in aviation.

Islamabad was looking to sell 51-100% of debt ridden PIA to raise funds and reform state owned enterprises but the bid shows that the process may not move forward.

PIA’s assets are worth PKR 152 billion including aircraft and routes.

But PIA has around 7,100 employees, 2,400 of whom are on daily wages, a hurdle in its privatisation.

PIA is making losses, owes billions of rupees in debt and its fleet is old and any investor would have to invest heavily to make it profitable, experts in the sector said.

PIA is banned to operate flights to European Union since 2020 as some of its pilots had fake licenses.

Changes in Pakistan’s 10 year old agreements with private Independent Power Producer (IPP) projects, largely financed by foreign lenders to address power shortages “increases the risk of investing and doing business in Pakistan even with sovereign contracts and guarantees”, said Sakib Sherani, an economist who heads Macro Economic Insights.

Other concerns raised by bidders were lack of government communication, unattractive terms and taxes on the sector and PIA’s legacy and reputation.

Also Read: Bibek Debroy, Renowned Economist and PM’s Economic Advisory Council Chairman, Passes Away at 69