The Pakistani government's latest efforts to offload PIA - Pakistan International Airlines (PK, Islamabad International) have once more stalled after an offer submitted by a Pakistani real estate developer, who was the only pre-qualified bidder to have put down the required "earnest money" ahead of the October 31, 2024, auction, fell way short of government sale price expectations.
Blue World City chairman Saad Nazir placed an initial bid of PKR10 billion (USD36 million) against a government-stipulated minimum reserve price of PKR85.030 billion (USD306 million) for 60% of PIA's shares. Having been given 30 minutes to reconsider its offer, the consortium stuck to its guns and refused to budge, resulting in the government refusing to immediately accept the bid and instead send it to cabinet for consideration.
After his bid was opened and assessed as too low, Nazir told journalists that was all PIA was worth and that it did not make commercial sense to raise the bid for a company with ‘significant leakages.’ He also said he intended to enlist Chinese and Turkish investors to finance his plans to lease aircraft for PIA.
The government is trying to privatise numerous state owned entities, including PIA, under a USD7 billion IMF bailout package.
Other prospective bidders have shied away, telling Reuters that there were concerns the government could or would not keep agreements made for PIA. One said any future change in government could result in a policy shift detrimental to the new owner. Earlier this month, the government walked away from power purchase contracts with five private companies and is also looking at renegotiating other state-guaranteed agreements.
Inconsistent government communication, unattractive terms and taxes, and PIA's reputation and legacy issues were some of other negatives cited by prospective bidders.
