CCoP approves PIA,s new privatisation structure

ISLAMABAD: The Cabinet Committee on Privatisation (CCoP) has approved divestment of 51% to 100% share capital of the PIACL) together with management control and the equity stake may comprise inter alia: sale of shares held by PIA Holdco and subscription shares or a combination of both as IMF has given its consent to the critical asks, subject to certain conditions, well informed sources told Newzshewz.
The Federal Cabinet, in its decision of February 6, 2024, considering the Transaction Structure report approved Transaction Structure for divesting 51% to 100% shares of PIACL together with the management control. Accordingly, Privatisation Commission undertook the privatisation process and carried out the bidding process which resulted in a single bid of Rs 10 billion against the Reference Price of PKR 85.030 Billion based on terms and conditions as approved by the Cabinet Committee on Privatization (CCoP) in its meeting held on October 31, 2024. Subsequently, upon recommendations of the Board of the Privatisation Commission (PC Board) in its meeting held on November 12, 2024, CCoP in its decision November 14 2024 rejected the bid
The PC Board in its decision of November 12, 2024 inter-alia resolved “IMF may be engaged on the asks of PQBs for exemption of 18 per cent Sales Tax and removing of negative equity to enable PIACL privatisation to happen and generate investor interest.
PC to float fresh EOI for divestment of PIACL subsequent to getting clarity on the critical asks of PQBs”.
In compliance to decision, discussions with IMF team were held in November and December 2024, on the critical asks of the Pre-Qualified Bidders (PQBs) made during the first attempt. Accordingly, IMF in their email of December 11, 2024, has given its consent to the critical asks, subject to certain conditions.
A high-level meeting was held in Prime Minister’s Office (PMO) on December 12, 2024 chaired by Prime Minister on way forward for Divestment of PIACL. Keeping in view the consent given by IMF on two major critical asks made by the PQBS in the 1″ unsuccessful privatisation attempt of PIACL and considering momentum generated for its privatisation during the 1st attempt and to avoid any further loss to the national exchequer, it was decided that a fresh Expression of Interest (EoI) to seek the Investors Interest in the Transaction will be published in the local and international newspaper(s).
Furthermore, in compliance to the directives of Prime Minister, the SIFC Secretariat notified a marketing committee for PIACL comprising of Minister for Privatisation Chair), Minister for Petroleum, Minister of State for Finance and National Coordinator of SIFC as its members, on December 19, 2024 with the mandate to Approach all prospective investors to elicit their interest in the privatisation of PIA etc. In this regard, the Committee has held three meetings on December 24, 2024, January 14 and February 11, 2025 to review various aspects of the investors’ engagement for Transaction.
Based on the deliberations of PIA Marketing Committee and recommendations by the Financial Adviser for Divestment of PIACL, i.e., EY Consulting LLC, Dubai, PC Board in its meeting held on March 17 , 2025 recommended following transaction structure for 2nd attempt of PIACL privatization (i) divestment of 51% to 100% share capital of the PIACL (consisting as a single class of ordinary shares) together with management control Equity Stake) as approved by the Federal Cabinet on February 6, 2024 (Transaction) ;(ii) the Equity Stake may comprise inter alia: (1) sale of shares held by PIA Holdco; and (ii) subscription shares of PIACL; (iii) or a combination of both (i) and (ii).
The PC Board further resolved that the final terms and conditions for transfer and acquisition of the Equity Stake, which may or may not differ from the terms and conditions previously approved by CCoP for the 1st privatisation attempt, shall be finalized during course of the bidding process and set out in the bid documents, for approval by CCoP.
The recommendation the PC Board to re-initiate the privatisation process for divestment of PIACL based on the transaction structure have been submitted for consideration and approval of the CCoP, in terms of Para 2(ix) of the Cabinet Division’s Notification of March 21, 2024.
Ends