Arif Habib consortium wins PIA privatisation bid for Rs135bn

The Arif Habib Corporation Limited–led consortium has won a majority stake in Pakistan International Airlines (PIA) after submitting the highest bid of Rs135 billion in the privatisation process of the national airline.

During the second round of open bidding, competition intensified when the Lucky Cement Limited–led consortium raised its earlier offer of Rs101.5 billion to Rs134 billion. In response, Arif Habib increased its bid to Rs135 billion, securing the lead.

The first round of bidding was held under the supervision of the Privatisation Commission and was broadcast live on television. This marked Pakistan’s second public attempt to privatise PIA.

Finance Minister Muhammad Aurangzeb said that regardless of who wins the bidding, the real success belongs to Pakistan. He highlighted that all participating bidders were local companies, calling it a “major and encouraging development” for the country’s investment environment.

“All the bidders today are from Pakistan, which is a huge thing. The best and biggest business groups are competing for the national airline, and the airline will be led by large, seasoned Pakistani investors,” Aurangzeb said.

He added that the transparent bidding process would help improve investor confidence and indirectly attract foreign investment. The finance minister also said the government wants state-owned institutions to become financially independent.

Aurangzeb congratulated Adviser to the Prime Minister on Privatisation Muhammad Ali and his team, saying, “I congratulate Muhammad Ali and his team for running a process that only professionals like yourselves can deliver.”

Before the bidding began, Muhammad Ali said that privatising PIA was part of the government’s broader reform plan. “Government’s aim is not to sell the national airline but to make it stand on its own feet,” he said.

Ali explained that the government decided to sell a 75% stake in PIA, although some bidders had shown interest in full ownership. He added that 92.5% of the bid amount would be used to improve the airline, while 7.5% would go to the government.

He further stated that bidders would be allowed to pay the amount in stages, with two-thirds payable upfront and the remaining one-third later. Bidders can also include up to two additional partners after the process is completed.

The open-bidding ceremony was held in Islamabad with three bidders participating. Since two bids crossed the government’s reference price of Rs100 billion, the final winner was determined through open auction.

The bidding groups included a Lucky Cement-led consortium with Hub Power Holdings, Kohat Cement Company, and Metro Ventures. Another group was led by Arif Habib Corporation Limited with Fatima Fertiliser, City Schools, and Lake City Holdings. The third bidder was private airline Air Blue (Private) Ltd.

This was Pakistan’s second attempt to privatise PIA after last year’s failed process, which attracted only one low bid. The bids were opened at a ceremony that began at 4:30 pm and was broadcast live on state television.

Prime Minister Shehbaz Sharif thanked officials for ensuring transparency, saying, “I am thankful to the ministers and head of the Privatisation Commission for making the process transparent.”

Fauji Fertiliser Company Ltd, once considered a strong contender, had already withdrawn from the bidding process last week.

Officials confirmed that out of the 75% stake sale, most of the funds would be invested directly into PIA. The government will retain a 25% stake, which bidders may choose to buy later.

Under the agreed terms, the winning bidder must pay two-thirds of the bid amount within 90 days, while the remaining amount can be paid within 12 months.

The government has also guaranteed 12 months of job security for PIA employees. Pension and medical benefits will be managed by the holding company, while salaries will be paid by the new owners.

Currently, PIA operates flights to 78 destinations and holds around 170 landing slots worldwide. Officials said the airline urgently needs fresh investment and professional management to restore its performance.