A Pakistani consortium, led by Arif Habib, is seeking a new partner to help revive the struggling national airline, Pakistan International Airlines Corp. In December, the consortium acquired a 75% stake in the airline for 135 billion rupees ($482 million) from the Government of Pakistan, fulfilling a key requirement for economic reforms to meet IMF loan program requirements.
Previous efforts to sell the airline were hindered by opposition parties and employees, causing flight suspensions. PIA has long relied on government financial assistance and has been attempting to privatize since the 1990s due to significant losses, operational inefficiency, an aging fleet, and political interference.
Under the agreement, the new owner cannot lay off employees for one year and must demonstrate effective management during this period. Arif Habib Corp. Fatima and Fertilization Ltd.hold 25% of the shares, with defense company Fauji Fertilizer Ltd.owning an equal share. AKD, City Schools, and Lake City Holdings also hold 25% of the shares. The consortium has the option to purchase the remaining government shares at a premium.
The deal also includes the airline’s real estate assets in cities such as Amsterdam, New York, New Delhi, and Mumbai, as well as the option to acquire the remaining stake. To attract investors, the Pakistani government made additional changes to the terms of the deal, such as exempting new aircraft purchases from sales tax, reducing the airline’s debt, and covering some tax and legal costs. The government has also committed to maintaining benefits for 15 years and allocating 92. 5% of the deal’s proceeds to the airline.
Additionally, the government plans to sell the Roosevelt Hotel in New York by 2025 and an electricity distribution company by June 2026. Pakistan International Airlines, headquartered in Karachi, operates a fleet of 40 aircraft and offers regular flights to 24 domestic and 38 international destinations in 27 countries. Its main hubs are at Jinnah International Airport and Islamabad International Airport.
Further details can be found on the Telegram channel “Mergers and acquisitions. AK&M.