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As part of its efforts toward the privatization of Pakistan International Airlines (PIA), the government has approved specific eligibility criteria for companies interested in purchasing major shares of this national carrier.
The newly approved criteria have set a minimum net worth requirement of Rs 30 billion ($100 million). This constitutes an essential step towards privatization.
Chaired by Privatisation Minister Abdul Aleem Khan, the Privatisation Commission board made a decision to establish eligibility criteria and oversee the selection of suitable bidders.
Investors interested in purchasing up to 100% stakes of PIA have until May 3rd to submit their Statements of Qualification. The government is inviting bids for between 51% and 100% ownership stakes in PIA.
To entice potential investors, the Privatisation Commission issued an Expression of Interest along with a draft Request for a Statement of Qualification (RSOQ).
Individual bidders must demonstrate a minimum net worth of Rs. 30 billion ($100 million). Consortium bidders are also required to reach this threshold, with their leading company having at least an 8 billion rupee net worth (approximately $25 million).
Some industry observers see PIA's set net worth requirement as relatively modest; others highlight the significant investment requirements needed to acquire and potentially expand PIA's operations in the future.
Additionally, the bidding consortium must demonstrate an annual revenue of at least Rs 200 billion or approximately $700 million; this will prove they possess sufficient finances to oversee such an expansive operation as PIA.
The decision to privatize PIA forms part of the government's larger strategy for reform and strengthening of this national carrier, which has faced financial strains and operational problems in the past.
Successful privatization and restructuring could bring great gains to PIA in terms of efficiency, service quality, and financial performance - ultimately benefitting both passengers and the airline itself.