ISLAMABAD, Mar 11 : Pakistan has assured the IMF of selling the Pakistan International Airlines by July after a botched attempt to sell the national flag carrier last year, according to a media report on Tuesday.
The PIA has been running into losses and as part of reforms urged by the International Monetary Fund (IMF), the government was putting on the block its stake, ranging from 51 to 100 per cent.
However, no serious buyer made the bid when the effort was made in October last year. The only offer of Pakistani Rs 10 billion by a local real estate developing company was rejected by the government.
An IMF team is in Pakistan to review the $7 billion loan program approved last year. Pakistan would get the second tranche of about $1 billion if it convinced the IMF team.
One of the concerns of the lender was the loss-making entities and a commitment by the Pakistan government to sell such organisations, but no headway has been made, apparently due to the dire economic situation, which has kept away the investors.
In a briefing to the IMF over Pakistan’s virtually stalled privatisation program, the federal authorities said they would try to privatise five to seven enterprises, including PIA, three financial institutions and three power distribution companies, The Express Tribune newspaper reported, citing the government sources.
The Privatisation Ministry briefed the IMF about the status of the PIA privatisation and gave a July 2025 deadline to sell the loss-making entity, said sources.
The sources said that the IMF was informed that the government was in the process of gauging the market sentiment before issuing the Expression of Interest for inviting investors by the end of this month.
It seems the government is not very confident about the success of the second attempt as it has again started the process of checking the investors’ confidence and whether there is any appetite for buying a bleeding asset.
The authorities informed the IMF that three parties may take part in the bidding. These include two bidders who had earlier withdrawn from the process after the government did not accept the condition to waive off 18% sales tax on the lease of the aircraft and taking out Rs45 billion liabilities from the PIA balance sheet before its privatisation.
The IMF has already agreed to relax these two conditions which along with the opening of European routes are considered major incentives for the success of the second bid on privatisation.
The IMF has been informed that the government wanted to sell three power distribution companies Faisalabad, Islamabad and Gujranwala by December this year. However, the decision of whether to sell all these entities in one go or take each enterprise separately in the market will be taken on the advice of the financial advisor.
The sources said that the government has also informed the IMF that the United Arab Emirates was interested in buying the First Women Bank Limited as a full commercial bank and the deal is expected by the end of May. However, the UAE wants to acquire the bank under a government-to-government deal instead of participating in open bidding.
The sources said that the government was also in the process of hiring a financial adviser for the sale of the Zarai Taraqiati Bank Limited. The government is hoping to sell the bank by November this year.
The authorities also expect to sell the House Building Finance Company next month, yet another deadline after multiple deadlines lapsed to sell it. (PTI)
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