- Govt is looking for for the PIA stake by June 3.
- Investors have offered a relief and responsibility coverage of the GST.
- Transfer of PIA liabilities to attract potential buyers.
Islamabad: The federal government officially invited the expressions of interest (EOIS) of potential investors for the privatization of Pakistani international airlines (PIA), marking a major development in its attempt to unload a controlling participation in the national carrier of the flag.
According to the privatization committee, the decision was made to sell between 51% and 100% of PIA shares, as well as management control, to the potential buyer. The interested parties have until June 3, 2025 to submit their EOI.
As part of the process, the government has announced a number of incentives for investors. This is in particular the relief of 18% general sales tax (TPS) on the purchase or rental of new planes.
In addition, protection and coverage will be provided in certain tax and legal cases, the Commission said.
This decision also implies the transfer of specific liabilities listed in the PIA balance sheet, aimed at making the offer more attractive for potential buyers.
This privatization effort is a central element of the government’s broader economic reform program because it seeks to alleviate the financial burden of public enterprises while attracting foreign and local investments in the aviation sector.
The privatization push occurs in the heels of the PIA publishing its first annual profit in more than 20 years, an important step which added to the government’s plans. Last week, the government said it appealed to EOI, following the approval of the privatization committee.
This marks the second attempt in recent years to privatize the PIA. The previous effort last year failed, with a single offer received, and that too, well below the minimum government expectation of $ 300 million.
In response to the concerns raised during the previous attempt, the government has since moved almost all the debts inherited from the PIA on its own assessment, thus improving the financial prospects of the airline for potential buyers.
Muhammad Ali, Prime Minister’s advisor to privatization, recently said that all previous road roadblocks had now been discussed. He confirmed that the sale of PIA was treated as a high priority transaction, with the aim of finishing the process in 2025.
As part of its broader economic reform program, and in accordance with the rescue conditions of the $ 7 billion International Monetary Fund (IMF), the government also plans to privatize electricity distribution companies and explore strategic options for the Pia Roosevelt hotel in New York.
The property could be sold squarely or refurbished via a joint venture with a high -level developer, who has potentially unlocked five times more value, said Ali.
This renewed privatization thrust reflects the government’s commitment to reduce the losses of public enterprises and to attract national and foreign investments in the key sectors.