Foreign businesses don't seem interested in buying the majority of shares in the national carrier, Pakistan International Airlines (PIA), as the privatisation process of the reorganised airline has begun.
Only two companies from Gulf countries have received investment documents by depositing $5,000, yet they have not submitted their tender applications. The deadline for tender submissions related to the privatization of PIA is May 3, with a likely extension of another month according to sources within the Privatization Commission.
Officials involved in the privatization, including PIA's financial advisor, are unfamiliar with attracting foreign investment. This lack of enthusiasm from foreign investors is disappointing, as Pakistani authorities have not even received their messages about the process.
Despite efforts such as roadshows conducted by the Privatization Commission and PIA administration, success in advertising the national carrier's sell-off has been limited.
In March, the PIA board of directors approved the government's plan to privatize the airline, aiming to raise $250-300 million through the sale, potentially to a Middle Eastern country. Last month, Pakistan offered a stake ranging from 51% to 100% of the loss-making PIA, in line with IMF recommendations.
The privatization panel set a deadline of May 3 to receive statements of interest and appointed EY Consulting as the financial advisor for the deal. The restructured PIA, offered for a 51%-plus stake, is presented as a "debt-lite" opportunity for potential investors.
The panel aims to finalize a share price deal by June 24, with the restructured PIA positioned as an opportunity to invest in a full-service airline. Despite holding the largest share of Pakistan's aviation market at 23%, PIA faces stiff competition from Middle Eastern carriers due to the lack of direct flights to destinations.
0 Comments