Pakistan took a significant step toward the privatization of Pakistan International Airlines (PIA) by approving specific eligibility criteria for companies interested in acquiring a major stake in the national carrier.
The approved criteria set a minimum net worth requirement of Rs30 billion or approximately $100 million for potential buyers.
The decision was made by the Privatisation Commission’s board, which is chaired by Privatisation Minister Abdul Aleem Khan.
The board not only approved the prequalification criteria but also established a prequalification committee to oversee the process of selecting suitable bidders.
The government announced an invitation for bids for the sale of between 51% and 100% of the stakes in PIA. Investors interested in bidding for PIA have until May 3rd to submit their Statements of Qualification.
To attract potential investors, the Privatisation Commission released an Expression of Interest along with a draft Request for Statement of Qualification (RSOQ).
According to the newly approved financial criteria, individual bidders are required to have a minimum net worth of Rs30 billion or $100 million, based on their most recent financial statements.
If a consortium of companies is bidding together, their combined net worth should be at least Rs30 billion. The main company leading the consortium must have a net worth of at least Rs8 billion or $25 million.
This minimum net worth requirement has been a topic of discussion among industry observers. Some believe that the set limit is relatively low, especially considering the substantial investment that will be required to acquire PIA and potentially expand its operations in the future.
Another important criterion set by the Privatisation Commission is that the bidding consortium must demonstrate a minimum aggregate annual revenue of Rs200 billion or approximately $700 million.
This criterion aims to ensure that the bidders have a strong financial background and the capability to manage a significant and complex operation like PIA.
The decision to privatize PIA is part of the government’s broader strategy to reform and strengthen the national carrier, which has faced financial challenges and operational issues in the past.
The successful privatization and restructuring of PIA could potentially lead to improvements in the airline’s efficiency, service quality, and financial performance.
