The PIA privatisation process has been extended, giving investors more time to submit their Expressions of Interest (EoI). The government of Pakistan announced a new deadline of June 19, extending the original cutoff by 15 days from June 3. This move aims to boost investor participation in one of the country’s largest divestment efforts in recent years.
Extension Linked to Eid ul Adha
A senior Privatisation Commission official confirmed that the extension was granted due to the upcoming Eid ul Adha holidays. All other terms, including offering between 51% to 100% equity with full management control, remain unchanged.
Read: Pakistan Open to Talks with India for Regional Peace: PM Shehbaz
Privatisation Linked to IMF Reforms
The PIA privatisation is part of broader reforms under the Extended Fund Facility (EFF) agreement with the International Monetary Fund (IMF). The goal is to reduce fiscal burden, streamline public enterprises, and attract foreign investment.
Incentives to Attract Buyers
To improve the deal’s appeal, the government has introduced incentives. These include exemptions on general sales tax (GST) for new aircraft and the removal of PIA’s debt from its balance sheet. This restructuring allows buyers to acquire a “net-zero balance sheet” company, avoiding the financial baggage that hindered past attempts.
Improved Offer vs Past Efforts
The current offer is simpler than the failed earlier bid, which offered 60% shares with a 15% optional top-up. That attempt collapsed due to PIA’s negative equity of Rs45 billion and a high 18% GST on aircraft. Now, with IMF-approved reforms, those liabilities are absorbed by the government.
Advisors and Outlook
EY Consulting LLC is advising the Privatisation Commission on this major transaction. However The government hopes to complete the PIA sale by the end of the year, aiming to revive investor confidence and deliver on key economic reforms.
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