By Staff Reporter
KARACHI: Lucky Cement Ltd., one of Pakistan’s largest conglomerates, said it has made no binding commitment to acquire Pakistan International Airlines Corp. (PIACL), despite being shortlisted with a consortium to conduct due diligence for a 51% to 100% stake in the debt-laden carrier.
“For clarity, neither the company nor the consortium has entered into any binding commitment with any party for the acquisition of equity in PIACL,” Lucky Cement said in a Wednesday filing with the Pakistan Stock Exchange. It emphasized that any decision to proceed depends on the outcome of a comprehensive due diligence process and necessary approvals.
“Any such commitment would only be made following satisfactory completion of due diligence, receipt of all applicable corporate and regulatory approvals, and a determination that the transaction is commercially viable,” the notice added.
It added that at this stage, the company, through the consortium, intends only to “undertake a comprehensive due diligence exercise and evaluate the viability of the potential acquisition opportunity.”
“Lucky Cement Limited, together with other prominent corporate entities, namely Hub Power Holdings Limited, Kohat Cement Company Limited, and Metro Ventures (Private) Limited, formed a consortium and submitted an Expression of Interest and Statement of Qualification for the proposed acquisition of a 51% to 100% equity stake, along with management control, in Pakistan International Airlines Corporation Limited (PIACL), being offered for divestment by the Government of Pakistan through a privatization process.”
Pakistan’s government on Tuesday approved four groups to bid for PIA’s majority stake as part of a push to privatize state-owned enterprises under a $7 billion International Monetary Fund program. Alongside the Lucky Cement-led consortium, approved bidders include a group led by Arif Habib Corp., which includes Fatima Fertilizer Co., The City School, and Lake City Holdings, as well as Fauji Fertilizer Co. and Airblue Ltd.
Fauji Fertilizer Co. also signaled caution, stating in a bourse filing that its board authorized due diligence but any deal depends on multiple conditions: “(a) the results of the aforementioned due diligence exercise, (b) the submission by the Company (and acceptance by the PC) of a competitive bid in relation to the proposed transaction, (c) execution of definitive agreements between the parties to the proposed transaction, and (d) fulfilment of all relevant and requisite corporate, regulatory and other approvals and consents.”
The government aims to offload a 51% to 100% stake in PIA through a competitive bidding process, a move tied to its efforts to raise funds and restructure cash-draining state-owned enterprises under a $7 billion International Monetary Fund program.
The sale, if completed, would be Pakistan’s first major privatization in nearly two decades, a litmus test for the government’s ability to overhaul a state sector long weighed down by inefficiency and political interference. PIA, 96 percent owned by the state through PIA Holding Company Limited, has racked up over $2.5 billion in losses over the past decade, battered by mismanagement, and operational woes.
Once a jewel of Asian aviation, the carrier has become a symbol of the fiscal strain inflicted by Pakistan’s state-owned enterprises.
Yet glimmers of a turnaround have emerged. In the fiscal year ending June 2024, PIA posted its first operating profit in 21 years, a feat driven by a sweeping restructuring effort. The government now aims to capitalize on that momentum, seeking to divest a controlling stake to raise funds and meet IMF demands for fiscal discipline and structural reform.
But the road ahead is fraught with challenges. A previous attempt to privatize PIA last year fizzled when the sole bidder, the Blue World City consortium, offered just Rs10 billion for a 60 percent stake, far below the Privatisation Commission’s floor price of Rs85.03 billion. That flop underscored the difficulty of attracting serious buyers for an airline saddled with debt and a tarnished reputation.
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