PIA Revival Plan - 'PIA Two' to be Formed on Temporary Basis

[Abbas Ali]

Cartoon in December 17 edition of 'The News' newspaper.


Source: thenews.com.pk

But, still no signs of 'PIA Two' that was to be formed by the end of December 2013.

Abbas

[Abbas Ali]

According to a report in December 28 edition of English daily 'Business Recorder', the government has started work on evaluation of PIA assets as a step towards privatisation of airlines' 26 percent shares.

Abbas

[Vaqar Khan]

Pakistan’s commitment to the International Monetary Fund (IMF) to sell 26% shares of national flag carrier Pakistan International Airlines (PIA) by the end of this year was not sacrosanct and a lot depended on the report of financial adviser, said Privatisation Secretary Amjad Ali Khan.
In a briefing on Thursday to the Senate Standing Committee on Finance and Privatisation on the brewing controversy over the privatisation of PIA, Khan said the December 2014 deadline could be extended, if needed.
He said the government would hire a financial adviser by the end of March, who would come up with a report on the technical and financial aspects after due diligence. The report will determine whether the state-owned air carrier could be privatised by December or more time would be required to complete the process.

Source: Express Tribune (Friday, 3 January 2014)

Full news report available:

http://tribune.com.pk/story/654048/nati ... rs-report/

[Zulfiqar]

Report in today's Dawn
http://www.dawn.com/news/1078061/diverg ... vatisation
Divergent views on PIA’s privatisation
The Newspaper's Staff Reporter

ISLAMABAD: Amid strong criticism by senators, two divisions of the federal ministry headed by Senator Ishaq Dar (privatisation and finance wings) on Thursday provided divergent information to a Senate committee about the proposed privatisation of Pakistan International Airlines (PIA).

A meeting of the Senate’s Standing Committee on Finance, Revenue, Privatisation and Statistics headed by Senator Nasreen Jalil of MQM was informed by Finance Secretary Dr Waqar Masood Khan that the government was required to appoint a financial adviser for the privatisation of PIA by March-end under an agreement with the International Monetary Fund (IMF). As part of the $6.64 billion bailout package, the government was also required to privatise 26 per cent shares of the company to a strategic partner by December this year, said Dr Khan, adding that the company’s accumulated losses had crossed Rs180 billion.

Privatisation Secretary Amjad Ali Khan, however, told the same meeting that the IMF benchmarks regarding dates and the number of shares to be sold were not sacrosanct. He said they could be changed and would depend on the report of the financial adviser.

He said the entire process of PIA’s privatisation would be firmed up depending on the advice of the financial adviser who is expected to be appointed in March this year. “It would be the report of the financial adviser which will determine if privatisation could be done in 2014 or will be delayed for two years,” he said.

The adviser’s report would suggest if the restructuring process could be completed in two to three years to make the entity viable for sale and to attract the best possible price.

The secretary added that even sale of 26 per cent shares was not sacrosanct and the number of shares could be increased or decreased.

On criticism from the PPP and MQM senators over the sale of public sector entities, Dr Khan said the sale process would take place in accordance with the law and the present government had decided to proceed with the sale of 65 entities approved by the Council of Common Interests (CCI) under the previous government.

He said the privatisation board had been constituted that would meet on Jan 8 to formally kick-start the privatisation programme. He assured the committee that the government would not show any haste in selling PIA, adding that the previous Board of PIA had also stressed the need for a public-private partnership for the betterment of the national carrier.

The deputy manager of PIA said the management committee of the national carrier had not been consulted by the Privatisation Commission or the Ministry of Finance about the PIA’s privatisation plan.

Senators Fateh Mohammad Hassani and Islamuddin Shaikh expressed serious concerns over the government’s privatisation plan.

Mr Shaikh accused the federal government of trying to create law and order problems in Karachi by going for PIA’s privatisation through a pre-planned conspiracy.

The crux of their criticism was that the government was moving into the ‘wholesale mode’ to benefit a particular group. But, they said they would not let this happen.

Senator Kulsoom Parveen said it appeared that the government had already decided to whom the PIA would be given.

Sughra Imam asked the senior officials about the justification to privatise profit-making entities and claimed that the government had already decided to sell PIA to the Hariri family of Lebanon. She claimed that a person appointed by the prime minister as his adviser on aviation happened to be working for the Hariri family.

Committee’s chairperson Nasreen Jalil said the committee had serious reservations over the privatisation of PIA and that national assets should not be sold in a rush. She said the members of the committee were not against privatisation, but the government should take steps for protection of rights of employees, consult the committee for positive proposals and conduct the programme in a transparent manner.

She said the government should also take steps to transform loss-making entities into profitable organisations because the continuous sale process would take the nation to a stage when nothing would be in its own control.

[faisal-777]

What's the deal with 26% when national corps are privatized ? When PTCL was privatised, same number of shares were sold. What's special about 26% ?

[Abbas Ali]

It seems The Roosevelt Hotel in New York and Hotel Scribe in Paris owned by PIA will also be sold.

News report in January 5 edition of English daily 'DAWN'.

Advisers for PIA transaction being hired

AMIN AHMED

ISLAMABAD: The government intends to privatise 26 per cent shares of PIA to strategic investors by the end of December, and hiring of financial advisers will be completed in March this year, reveals an official document.

In the meantime, PIA has been allowed to continue leasing more efficient airplanes and rationalising routes, according to the finance ministry document.

Financial advisers will also be hired for sale of PIA Investment Limited’s non-strategic assets in New York and Paris by the end of March.

http://www.dawn.com/news/1078395/advise ... eing-hired

Abbas

[Amaad Lone]

That is the only way the government can pay off 12000 employees that will not be a part of the private PIA.

PIA should be able to windfall hundreds of millions of dollars making it easy for the government to absorb the toxic assets of PIA.

Mainly the non-fleet debt and the golden handshake for 12000 employees.

[taha_imran4]

I'm guessing they're more concerned with privatizing these hotels than they are with PIA itself.

[riz]

Utterly nonsense idea of selling these hotels.
If it happens the money will go into mutant miyan brothers pockets and will be distributed to buy political loyalists to help them in the next elections.
Pia with the number of employees will remain the same and even if they are able to offload some of the workforce they will be again employed by the next PPP govt. These tall claims are only to trick IMF and attract an investor who is ready to gamble with his money.

[Abbas Ali]

Privatization Commission Board Meeting Approves Sale of 26 Percent PIA Shares



* Privatization Commission (privatisation.gov.pk) board meeting today approved sale of 26 percent of PIA shares.

* Planning and road map for this sale of shares also approved.

* Financial adviser in this regard will be appointed by the end of March.

* Process of sale of airline's 26 percent shares will be completed by the end of this year.

Info Source: Dunya News

Abbas

[Abbas Ali]

Press release excerpt from Privatization Commission website privatisation.gov.pk.

Dated 8th January, 2014

Meeting of the Board of directors of the Privatisation Commission was held today the 8th January, 2014, in Islamabad under the Chairmanship of Mr. Mohammad Zubair, Chairman/Minister of State, Privatisation Commission to consider the following:-

- Divestment of minimum of 26% shares of PIA to a strategic partner

With regard to PIA, the Board resolved to divest minimum of 26% shares to a strategic investor and approved initiation process for the selection of the Financial Advisor for the purpose. Further the Board resolved that the employees’ interests shall be protected in the process.

http://www.privatisation.gov.pk/Handout ... ission.htm

Abbas

[TAC777]

It is important to read what was earlier said by Secretary, Privatization, Amjad Ali Khan who is a very upright,honest and a thorough professional, well respected in Islamabad .

Privatisation Secretary Amjad Ali Khan, however, told the same meeting that the IMF benchmarks regarding dates and the number of shares to be sold were not sacrosanct. He said they could be changed and would depend on the report of the financial adviser.

He said the entire process of PIA’s privatisation would be firmed up depending on the advice of the financial adviser who is expected to be appointed in March this year. “It would be the report of the financial adviser which will determine if privatisation could be done in 2014 or will be delayed for two years,” he said.

The adviser’s report would suggest if the restructuring process could be completed in two to three years to make the entity viable for sale and to attract the best possible price.

The secretary added that even sale of 26 per cent shares was not sacrosanct and the number of shares could be increased or decreased.

[taha_imran4]

They'll never manage to privatize it. The process will keep on getting stalled and they won't achieve anything no matter how hard they try.

[Vaqar Khan]

Government to miss December deadline for PIA privatisation. Read the news item in Express Tribune:
http://tribune.com.pk/story/667639/pia- ... ys-zubair/

[Abbas Ali]

PIA likely to be bifurcated before privatisation: Dar

MASOOD HAIDER

NEW YORK: Finance Minister Ishaq Dar has said that Pakistan International Airlines (PIA) is likely to be split into two companies, with a holding group retaining about Rs250 billion in debt and the excess personnel and a “new PIA” holding the lucrative landing rights and the new aircraft.

In an interview with the Wall Street Journal on Tuesday, Mr Dar said: “Then, the government plans to sell a 26 per cent stake in that ‘new’ PIA to a strategic partner.

“This will have more attraction to potential investors. They will enter into a clean transaction and not be evaluating and calculating the legacy and the bad negative numbers of a poor balance sheet.”

The Journal quoted the minister as saying the government expected to complete a series of big privatisation transactions this spring, in moves that would raise badly needed foreign exchange and dispel growing concerns about the slow pace of reforms.

Source: DAWN