More bad news for bankrupt Pakistan, Shehbaz govt decides to sell one of country's biggest company, the company is...
After India's Operation Sindoor, Pakistan's condition seems to be worsening and now it's clearly visible too. One major sign of this is the upcoming sale of one of its biggest companies. The Pakistani government is preparing to sell its national airline, Pakistan International Airlines (PIA), to private players and reports say that they have already started inviting bids for it.
Originally, the last date to submit bids was June 3, but it has now been extended to June 19. This move gives potential buyers more time to prepare their proposals to take over PIA.
The government wants more people to participate in the bidding process, which is why they have given a 15-day extension. This sale is considered one of the biggest and most important privatization steps in Pakistan's recent history. Govt offering to sell between 51-100 per cent of its ownership
A senior official from Pakistan's Privatization Commission confirmed to The News that the deadline for submitting bids has been extended, but all other terms and conditions for the sale remain unchanged. The government is offering to sell between 51 per cent and 100 per cent of its ownership in PIA, along with full management control.
When asked why the deadline was extended, the official said it was because of the Eid-ul-Adha holiday. This move comes as part of the government's plan to reduce its fiscal deficit, fix loss-making state-owned enterprises, and attract foreign investment. The privatization of PIA is also part of the broader economic reforms agreed upon with the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) program. What was the plan earlier?
To make the deal more attractive, the Pakistani government has introduced new incentives. These include GST (Goods and Services Tax) exemptions on new aircraft and removing PIA's loans from its balance sheet. The goal is to present potential buyers with a 'clean, zero-debt' balance sheet. A revised price benchmark for the deal may also be set soon.
This new plan is much simpler and more straightforward compared to the previous failed attempt. Earlier, the government had offered 60 per cent of shares with an optional 15 per cent top-up. However, that plan failed mainly because of PIA's huge negative equity of 45 billion rupees and an 18 per cent GST on aircraft, which turned buyers away.
EY Consulting LLC is advising the Privatization Commission on this sale. The government hopes to complete the process within this calendar year.
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