Arif Habib Group successfully purcahses PIA for Rs135 billion

Arif Habib Group won the bid to purchase Pakistan International Airlines for Rs135 billion Tuesday after a fierce bidding battle with Lucky Cement Group bid, reported 24NewsHd TV channel.

Lucky Group gave a final bid of Rs134 billion but Arif Habib won the bid after offering Rs135billion, reported 24NewsHD TV Channel.  

During first round of auction for the privatisation of Pakistan International Airlines, two prospective buyers — Arif Habib and Lucky Cement — offer bidding higher than the reference price of Rs100 billion.

The second round began with Rs115 billion as the base price. The round concluded with Lucky Cement revising its bid to Rs120.25bn, while in response, Arif Habib revised its bid to Rs121bn. Following Arif Habib’s revised bid, Lucky Cement opted for a 30-minute.

In the second round, Lucky Cement revised its bid to Rs134bn, while in response, Arif Habib revised its bid to Rs135bn, following which Lucky Cement conceded and congratulated Arif Habib on securing the national carrier bidding.

Three big consortiums are vying to purchase shares in the airline. In second phase, Arif Habib consortium bid Rs121 billion while Lucky Consortium bids Rs120 billion. The bids submitted in the morning came from pre-qualified bidders Lucky Cement, private airline Airblue and investment firm Arif Habib.In first phase, Lucky Cement has put up a bid of Rs101.5 billion, Airblue Rs26.5bn, and the Arif Habib consortium bid Rs115 billion.

Former federal minister Gohar Ejaz has said that Arif Habib Consortium bid Rs 135 billion for the privatization of PIA and now national carrier's glorious past will be restored.

Finance Minister Muhammad Aurangzeb, speaking at the ceremony, thanked the PM‘s aide and his team for their efforts and hailed the bidding process in terms of transparency. He added that it took a lot of time and effort to get to a good place where we are today.

“All of the bidders today are from Pakistan. I used to say that no matter which team wins, Pakistan would win.”

He lauded Pakistan‘s biggest conglomerates for vying for the best airline and said that the flag carrier would be led by investors and some of Pakistan’s most experienced business people.

The fact that they have stepped up is a doubtless sign that anyone who is the successful bidder will take it not only to where we were, but where we need to be in the comity of nations, FM Aurangzeb added.

At the outset of the ceremony, the Adviser to the prime minister on privatisation, Muhammad Ali, addressed the audience.

He hoped that PIA’s privatisation would open paths for investment in the country.

“I would also like to thank all bidders who are present today, and those who were part of the bidding process but did not reach the final round. We wouldn‘t have been here without them, and this process wouldn’t have been completed,” he said.

Representatives of the bidding groups walked in one by one to deposit sealed offers into a transparent box, briefly fumbling as they pushed envelopes through the slot in a public ceremony in Islamabad that was broadcast on state television.

The reference price for PIACL’s bidding will now be approved by the Privatisation Commission Board and the Cabinet Committee on Privatisation after bids have been received.

Earlier, Federal Cabinet has ratified the decisions of the Cabinet Committee on Privatization regarding the privatization of Pakistan International Airlines. The cabinet ratified the decision at its special meeting, held in Islamabad today with Prime Minister Shehbaz Sharif in the chair. 

The Federal Cabinet also offered prayers for the successful and smooth completion of the privatization process of PIA.The bidding process for the privatization of PIA will be broadcast live on television.

It is worth-reminding here that the Fauji Fertilizers had opted to stay out of the auction.

As many as 92.5 percent of amount generated from the auction will be again invested in the PIA, and only 7.5 percent will be deposited in the national kitty.

The purpose is to invest more and more money in the revival of the PIA.

Immediately after the privatization, Rs80 billion will have to be invested in the airline, while the government will retain the remaining 25 per cent shares in the national flag carrier.

The successful bidder will have the option to either buy 25 per cent shares or leave it to the government.

The buyer will be exempted from the payment of sales tax on the purchase of new planes.

Similarly, the party will also neither pay Rs7 billion to the Pakistan Aviation nor will it pay to the Federal Board of Revenue (FBR) arrears amounting to Rs26.6 billion.

After an approval by the federal cabinet, the documents received from the bidders will be signed.

Following that, the privatization commission will complete all legal formalities.

The airline’s name will not be changed even after its privatization and it will retain its status as the national flag carrier.

Out of 34 planes in its fleet, the national flag carrier is presently operating 18 planes, and it plans to double the number of planes in the next three to four years.

The airline has signed agreements with 97 countries.

Besides that, it also has the right to land its planes in over 170 countries.

It has been decided to protect the jobs of PIA’s employees for one year.

Apart from that, the retired employees will continue to receive pensions and other benefits.

The airline’s strength, which in 2011 stood at 11,500 employees, has now shrunk to 6,500 only.

PM Shehbaz’s adviser terms PIA’s privatization big occasion

Speaking to the media, Adviser to PM Shehbaz on Privatization Muhammad Ali said that now when the first phase of bidding was complete, it was time to go to the PC Board.

“The Board will review the PIA’s reserve price,” he said, adding, “Nobody knows about the reserve price. Following an approval of the price by the Board, it will be sent to a cabinet committee, which will give the final approval.”

It was a big occasion, he went on to say, as no state-owned entity had been privatized for the last 20 years.

PC Board meets

Bidding for Pakistan International Airlines (PIA) moved a step closer on Tuesday as the Privatisation Commission Board presented recommendations for the reference price for the 75% stake.

The reference price will now be submitted to the Cabinet Committee on Privatisation (CCOP) for approval, after which the federal cabinet will formally endorse it.

Following the completion of the first phase, the matter will be referred to the Privatisation Commission (PC) Board and the Cabinet Committee on Privatisation (CCOP) for consideration of the minimum expected price for the divestment of PIACL.

Subject to CCOP’s approval, the second round scheduled later in the day will see the opening of the sealed bids, which will be broadcast live.

“Today’s PIA bidding is built on transparency, efficiency, and responsibility supporting fairness, accountability, and public trust through a clear process,” the Privatisation Commission said on Tuesday.

Reporter: Waqas Azeem