A consortium led by a Pakistani investment firm won an auction on Tuesday with a $482 million bid for a majority stake in the embattled national carrier PIA, a deal seen as a litmus test of the government's pledge to sell off loss-making state companies.
Pakistan International Airlines (PIA), long accused by critics of being bloated and poorly run, has been burning through cash as the government struggles with a balance of payments crisis.
Three Pakistani firms competed in the auction carried live by state broadcasters, with representatives placing their offers in a clear box during several rounds of bidding.
The Arif Habib investment group-led consortium emerged on top with a bid of $482 million (135 billion rupees) for the 75 percent stake on offer. It has an option to buy the remaining 25 percent in the coming months.
"It was essential to make this process transparent because the biggest transaction of Pakistan's history is about to take place," Prime Minister Shehbaz Sharif told his cabinet in a televised statement as the bidding began.
The rival bidders were a consortium led by Lucky Cement, which bid $480 million (134 billion rupees), and the private Pakistani carrier Air Blue, with $94.5 million (26.5 billion).
The sale offer comes after last year's failure to privatise PIA, with just one bid for $36 million - far below the $300 million to $305 million wanted by the government.
Before being delisted from the Pakistan stock exchange, the airline reported a net loss of $437 million for the 2022 full year on revenue of $854 million.
More sales on deck?
Islamabad has promised to divest dozens of its cash-burning enterprises in the finance, energy, industrial and retailing sectors by 2029 under a $7 billion loan programme agreed with the International Monetary Fund last year.
Many of the companies have incurred billions of dollars in losses because of mismanagement and corruption, forcing the government to inject funds to keep them afloat.
Founded in 1955, PIA was a symbol of national pride and rapid growth for years, with a pathbreaking international network and even flight attendant uniforms created by French designer Pierre Cardin in the 1960s.
But its reputation suffered after racking up heavy losses as well as serious safety lapses.
It was banned from flying to the European Union, Britain and the United States in June 2020, a month after one of its Airbus A-320 jets crashed onto a Karachi street, killing nearly 100 people.
Europe and Britain allowed PIA flights to resume this year, but operations have not yet resumed for the United States.
Just 18 of its fleet of around 34 planes are in active service, according to officials.
