The government, in collaboration with PIA Holding Company Limited (PIA Holdco), has initiated the process of privatizing Pakistan International Corporation Limited (PIACL) and has invited Expressions of Interest (EOI) from potential investors. The invitation extends to acquiring anywhere between 51% and 100% of PIACL’s share capital along with management control. The deadline for submitting EOIs is May 03, 2024.
According to the announcement, the terms and conditions for the transfer and acquisition of the Equity Stake will be outlined in the bidding documents. These documents will be finalized post the sanctioning of Scheme of Arrangement (SOA) and the completion of the privatization process.
Interested entities are required to submit their EOIs in duplicate in hard copy to the Privatization Commission, accompanied by a non-refundable processing fee of $5,000 or approximately Rs1.4 million. The EOIs must be available with the Privatization Commission, and the processing fee must be paid by 16:00 hours on May 03, 2024.
BACKGROUND OF PIA’S PRIVATISATION
In efforts to restructure and privatize PIACL, the government has established PIA Holdco, a company limited by shares. PIACL and PIA Holdco have jointly filed a Scheme of Arrangement (SOA) with the Securities and Exchange Commission of Pakistan (SECP). The SOA outlines the transfer of certain non-core assets and liabilities (the Non-Core Undertaking) from PIA Holdco.
Per the SOA, PIACL will retain its core assets and liabilities (the Core Undertaking). This includes assets, liabilities, employees involved in air transport operations, and related services. Additionally, PIACL’s existing shareholders will transition to become shareholders of PIA Holdco, maintaining their current ownership proportions.
Under the SOA, PIA Holdco will be listed on the stock exchange, while PIACL will cease to be listed. Operational arrangements between PIACL and PIA Holdco, such as office space and sales offices, may be established as necessary for continued operations, subject to determination during the privatization process.
