Lucky Cement consortium submits Rs134bn offer; federal govt to get Rs10.12bn from bidding proceeds
Saifullah Ansar
ISLAMABAD: The Arif Habib Corporation Limited–led consortium acquired a majority stake in Pakistan International Airlines (PIA) with the highest bid of Rs135 billion in an auction held for the privatisation process of the national flag carrier on Tuesday.
Arif Habib raised its bid from Rs115 billion to Rs135 billion after the Lucky Cement Limited–led consortium increased its earlier bid of Rs101.5 billion to Rs134 billion in the second round of the open-bidding.
Arif Habib and Lucky Cement consortia advanced to the open auction stage after placing offers above the reference price of Rs100 billion, while private airliner Airblue exited the bidding after submitting an offer of Rs26.5 billion.
In the first round of the open auction, Lucky Cement submitted a bid of Rs115.5 billion, surpassing Arif Habib’s opening offer by Rs500 million.
The round concluded with Arif Habib increasing its bid to Rs121 billion, while Lucky Cement closed the session with an offer of Rs120.25 billion.
The organisers then announced a 30-minute recess at the request of Lucky Cement.
Before the break, Finance Minister Muhammad Aurangzeb remarked that whoever emerged successful in the bidding process, the ultimate victory would be Pakistan’s.
Addressing the ceremony, the finance minister highlighted that all bidders participating in the privatisation process were Pakistani, describing it as a “major and encouraging development” for the country’s investment climate.
“All the bidders today are from Pakistan, which is a significant milestone. The country’s largest and most seasoned business groups are competing for the national airline, which will be led by experienced Pakistani investors,” Aurangzeb said.
He added that the bidding process would indirectly promote foreign investment by boosting investor confidence and underscoring Pakistan’s commitment to transparent economic reforms.
The session, which resumed with a base price of Rs125 billion, concluded with Arif Habib securing a 75% majority stake in PIA with a winning bid of Rs135 billion.
The Lucky Cement Limited-led consortium comprised power producer Hub Power Holdings Limited, Kohat Cement Company Limited KOHC, and investment firm Metro Ventures.
The Arif Habib consortium included fertiliser maker Fatima Fertiliser Company Limited, private school network City Schools and real estate firm Lake City Holdings Limited.
Meanwhile, government officials have said that of the amount paid for the 75% stake, 92.5% of the proceeds will be invested directly into PIA, while the remaining 7.5% — amounting to Rs10.12 billion — will be transferred to the federal government.
The government-retained 25% stake has been termed a valuable asset, and successful bidders will have the option to acquire it at a later stage or allow it to remain with the state, according to the privatisation framework.
Speaking before the open bidding, Adviser to the Prime Minister on Privatisation Muhammad Ali said that privatisation of the national flag carrier was part of the government’s reform agenda.
“Government’s aim is not to sell the national airline but to make it stand on its own feet,” he added.
Ali said that the privatisation of PIA will bring investment to the country, adding that the government wanted to revive the past glory of the airline.
He said the government had decided to privatise between 51% and 100% of the national airline’s shares, adding that some bidders had expressed interest in acquiring a 75% stake.
He further explained that bidders would be allowed to make payments in phases, with two-thirds of the amount payable upfront and the remaining one-third at a later st.
