ISLAMABAD: The Arif Habib-led consortium has formed a special purpose vehicle, PIA Equity Limited (PIAEL), to acquire 100 per cent ownership of Pakistan International Airlines, while also submitting a notice of intent backed by a standby letter of credit (SBLC) to exercise its call option for the remaining 25 per cent stake, according to the Privatisation Commission.
The move advances towards full privatisation of the national carrier despite the consortium missing a previously expected Rs83 billion payment deadline tied to earlier terms. The government, meanwhile, is targeting the completion of management transfer by May 25 under the share purchase agreement framework.
The consortium comprises Arif Habib Corporation, Fauji Fertilizer, Fatima Fertilizer, Lake City Holdings AKD Group and The City School.This follows the Competition Commission of Pakistan’s approval of the transaction a day earlier, after a Phase I review under the Competition Act, 2010.
The consortium is working with the Privatisation Commission to advance the deal towards completion.The acquisition forms part of the government’s privatisation programme and is aimed at reviving the loss-making national carrier and reducing its reliance on state support.
The development comes amid renewed controversy over the airline’s valuation and sale structure. A white paper by the Peoples Unity of PIA Employees (CBA) sharply criticises the deal, arguing PIA, which posted a Rs26 billion profit in 2024, is being transferred for just Rs10 billion in upfront cash while leaving more than Rs650 billion in liabilities with the public sector.
The report calls the arrangement “public risk, private gain” and says the sale price is far below asset value, citing Rs187.3 billion in total assets, international route rights, airport slots and real estate holdings it says alone exceed the cash consideration.
Under the 100 per cent structure, the transaction is valued at about Rs180 billion, including Rs55 billion in government proceeds and Rs125 billion in planned equity injections for fleet expansion and restructuring.
