ISLAMABAD: Al-Nihang Group’s PKR 100 Billion Offer Aims to Revitalize PIA Amid Privatization Interest from Provincial Governments
Al-Nihang, an overseas Pakistani group, has placed a significant bid of PKR 100 billion to acquire Pakistan International Airlines (PIA). The ambitious offer includes taking on PIA’s PKR 250 billion debt, doubling employee salaries over a 30-month period, and modernizing the airline’s fleet. This proposal comes on the heels of both Khyber Pakhtunkhwa (KP) and Punjab governments expressing interest in acquiring the struggling airline.
In an offer letter submitted to Pakistan’s Ministers of Privatization, Aviation, and Defense, Al-Nihang outlined its comprehensive plan to acquire full ownership of PIA. The group’s bid is intended to stabilize the cash-strapped airline, which is currently shouldering a debt burden of approximately $2.9 billion, and facing operational and financial challenges despite numerous government bailout packages in recent years.
The Al-Nihang Group has pledged not only to retain the existing workforce without layoffs but also to invest in PIA’s infrastructure by adding modern aircraft to its fleet. Additionally, it proposes to position PIA as a regional hub for engineering and maintenance services, aiming to attract other airlines and expand revenue streams.
This bid follows KP’s recent expression of interest in the PIA privatization process. The KP Investment Board has communicated intentions to Federal Minister for Privatization Abdul Aleem Khan regarding their readiness to bid. Meanwhile, the government’s privatization process has thus far only attracted one offer from real-estate developer Blue World City, which bid PKR 10 billion for a 60% stake—falling short of the government’s set minimum price of PKR 85 billion.
The IMF has recommended the sale of loss-making state-owned enterprises like PIA to help stabilize Pakistan’s economy. However, recent incidents affecting PIA’s operations have intensified the need to regain public trust, making this bid from Al-Nihang, with its detailed restructuring plan, a potential turning point for the national airline’s future.
Al-Nihang, a Pakistani group based overseas, has submitted a bid of PKR 100 billion to acquire Pakistan International Airlines (PIA). The offer includes paying off PIA’s debt, a 100% salary increase for employees, and modernizing the airline’s fleet. This comes after both the Khyber Pakhtunkhwa and Punjab governments expressed interest in acquiring the struggling airline.
Al-Nihang, an overseas Pakistani group has offered to acquire Pakistan International Airlines for the cost of PKR 100 billion amid a set of terms and conditions, as per a report.
The bid for privatisation by Al-Nihang comes days after both the Khyber Pakhtunkhwa and Pakistan’s Punjab state governments had offered to acquire the airlines.
The group wrote an offer letter to Pakistan’s Ministers of Privatisation, Aviation and Defence amongst other authorities and outlined its proposal to acquire complete ownership of the PIA.
Al-Nihang Group said that it will acquire the full shareholding of PIA in accordance with the terms outlined in the tender proposal, assuming comprehensive ownership. The group has also offered to pay off PIA’s PKR 250 billion debt.
Money starved PIA has been under a massive debt burden of approximately USD 2.9 billion. Despite multiple bailout packages being provided to it by the government in recent years, PIA is struggling to stay afloat. Al Nihang’s offer amid this background comes as a breather to the airlines.
The group has also said that there will be no employee layoffs and instead offered a 100% increase in salaries over 30 months.
According to the Business Plan the introduction of modern aircraft to PIA’s fleet and the group has proposed establishing PIA as an engineering and maintenance hub for other airlines.
These developments came days after the Khyber Pakhtunkhwa government expressed interest in participating in the PIA privatization bidding. According to details, the KP Investment Board wrote to Federal Minister for Privatization Abdul Aleem Khan, expressing its intention to submit a bid.
Meanwhile, the final bidding process for the PIA privatization saw just one bid of PKR 10 billion ($36 million) for a 60% stake in the national flag carrier.
According to sources, the Pakistan government had pre-qualified six groups in June, but only real-estate Development Company, Blue World City participated in the bidding process, placing a bid that was below the government-set minimum price of PKR 85 billion.
This privatisation effort is in line with the recommendations given by the International Monetary Fund (IMF) to the Government of Pakistan to sell off all loss-making state-owned enterprises so as to stabilise the economy. The recent accidents make it tough for the company to gain trust during a time when it is causing heavy burdens to the national exchequer.
