Consortium submits bank guarantee for remaining 25pc PIA stake

KARACHI: The Arif Habib-led consortium has submitted a standby letter of credit and a bank guarantee to the Privatisation Commission for the purchase of the government’s remaining 25 per cent shareholding in Pakistan International Airlines (PIA), according to details reported on Tuesday.

The financial instruments were submitted within the deadline set for the offer process, with April 28 fixed as the last date.

The consortium had already acquired a 75pc stake in the national flag carrier for Rs135 billion. Under the transaction structure, the remaining 25pc stake is priced at Rs45bn, taking the total value of the acquisition to Rs180 billion.

Of that amount, Rs55 billion has been paid to the government, while Rs125 billion is to be invested in PIA.

Shahid Ali Habib, chief executive officer of Arif Habib Ltd, said the required guarantee had been provided for the remaining payment timeline.

He told Dawn, “The Arif Habib group has submitted bank guarantee that the money would be available in 12 months.”

The consortium includes Fatima Fertiliser, Fauji Fertiliser, AKD Group and Lake City Holdings. With the latest step, the group now holds 100pc of the airline.

The submission is being seen as another milestone in PIA’s long-running privatisation process, with the consortium indicating that it is prepared to assume control once the remaining regulatory and procedural formalities are completed.

The consortium expects the outstanding procedural requirements to be completed without delay so that the acquisition process can move ahead smoothly towards completion.

Management transition expected in early May

Management changes and full private control are expected by early May. Once that process is completed, the airline is expected to be free of government-appointed board members.

The latest development comes as the privatisation process moves closer to completion after the consortium’s acquisition of the majority stake and the submission of the required financial backing for the balance shares.

PIA’s privatisation has remained under discussion for a prolonged period, and the filing of the standby letter of credit and bank guarantee marks a significant procedural advance in the transfer of the remaining state-held shares to the consortium.