ISLAMABAD: PIA Demanded to Nip Airport Security Plan in the Bud as Govt Decides to Divest 100 % Shares The government has decided to put up for sale its 100% shares of Pakistan International Airlines (PIA) and at least one flat of the shares would be sold off but on earning a 12 per cent premium over bid price with an option to pay that amount after lapse of one year form transaction conclusion.
The government has also decided to not take the bid money in cash beyond 7.5%, while 92.5% bidder will put in PIA company instead of the exchequer, officials told The Express Tribune. In the latest failed effort, bidders could offer 15 percent of their bid money in cash.
It would not be less a surprising one as following the “No Government role” precondition placed by four bidders that participated in the bidding process with PIA Officials.
Next week there will be an auction for 75 percent of the shares, they said, with the winner being offered during the next month to buy additional 25 percent at a price that will be high by 12% than previously won it. The premium will be costlier than by making the payment after one year, against cash upfront, added the sources.
Prime Minister Shehbaz Sharif earlier in a statement had announced that the government would sell 60% of PIA shares on December 23.
PM’s adviser on privatisation, Muhammad Ali, has also confirmed the development.
PM Shehbaz Sharif meets bidders for PIA privatization: “Transparency & merit are our top priorities. Bidding on Dec 23, 2025, will be live on TV nationwide.” Aims to restore PIA’s glory as “Great People to Fly With” & boost tourism. pic.twitter.com/rqgFBQEpGd
— Aqsa Khan (@Aqqssaa12) December 3, 2025
4:10 pm All bidders have sought at least 75% stake for easy decision-making and some even want full ownership, said Ali. The government has opted to provide a green shoe option to bidders for the residual 25% stake at post-money valuation with a 12% premium, as per the advisor.
The last effort failed, with the government offering just a 60% stake — and managing to attract only one serious bidder, a real estate developer.
But the finance ministry believes that the government will be able to justify a 12% premium as financial condition of company that will get better following its 92.5% investments in it, sources said. A finance ministry spokesman did not comment on this article. Sources added that it has been agreed that the government will forego its right to demand 100% of the bid amount and only receive 7.5% of it.
But Ali said the government’s broader goal is to resurrect PIA and return it to its former state of glory. “This does not just call for massive funds in the form of overhauling the entire fleet and purchasing planes, etc. So it is decided that 92.5% from the bid amount goes into company,” a privatisation advisor said.
PIA is a shadow of its former self, and years of mismanagement have brought it to where a revival will need hundreds of billions of rupees in investment followed by injection of fresh resources to put the airline on a path back to financial sustainability. The airline has been managed by retired air force officers.
To make it more attractive, the government parked $4 billion worth of PIA’s debt into a holding company last year — a liability that is now serviced by the taxpayer. For the current financial year, PIA will receive Rs34. 7 billion from the budget to cover debt and payments for pensions and medical bills, according to official documents.
Sources said that with Rs654 billion being allowed for grandfathering of financial liabilities, new management of PIA will have to face the challenge of tax and airport tenabilities on account of around Rs26 billion. There will also be a need to exchange some dues on rentals and other aviation charges outside the country.
The previous failed attempt had a reference minimum price of Rs85 billion for selling 60% stake when the net equity of PIA was negative Rs45 billion.
According to the Privatisation Commission officials PIA had a positive equity of Rs30 billion, 18% sales tax on aircraft leases was waived and international routes were also cleared. They suggested that these options serve to make it easier to justify eliciting a better sale price, especially since 92.5 per cent of the bid money will be ploughed back into the company once more.
Sources say the government has shown Rs35 billion jet-setting as DTC under the PIACL balance sheet, and exempts the buyer from any further tax liability to that extent of DTC in future.
Front-runners Pakistan’s leading business families and groups are among the bidders such as Lucky Cement Consortium, Arif Habib Consortium Fauji Foundation controlled Fauji Fertiliser and Air Blue.
Currently, the PIA has a fleet of 34 aircraft but in working condition are only 18. Its most valuable asset is its air service agreements with 97 countries and more than 170 paired landing slots around the world. Desirable spots (like those out of London Heathrow) are very valuable when PIA is bidding.
The government has also made the offer more sweet by guaranteeing further funding to enhance the effective net equity position on PIA’ balance sheet, indemnity for shifting of stated liabilities and indemnity against legal claims.
But the winners will have to wait before they can cash in their investment.
