(Bloomberg) -- Pakistan received just one bid for a stake in the national carrier as five other consortiums stayed away from one of the country’s major privatization attempts.
Blue World City, which is a real estate project of two groups in construction that also owns a news channel, will bid for a 60% stake in Pakistan International Airlines Corp. in the Oct. 31 auction as the lone bidder, Chairman Saad Nazir said by phone. The government has decided to retain the remaining stake, he said.
Pakistan Air shares fell as much as 8.1%, the most in almost three weeks, before recovering the losses to 2.7% at the provisional close.
This transaction is a part of Prime Minister Shehbaz Sharif’s pledge to the International Monetary Fund to privatize the government’s loss-making entities to reduce the financial burden on the country’s economy. The airline, which is regularly bailed out by the government, has not made a profit in almost two decades and mounted over 800 billion rupees of debt.
“We have confidence that we can make it stand again on strong footing with Chinese and Turkish investors,” he said. Blue World City is a real estate project of the BGC-IGC consortium that is engaged in businesses including construction and owns a news channel.
A total of six groups were shortlisted to bid for a majority stake in the carrier including private airline Airblue Ltd., Arif Habib Corporation Ltd., Air Arabia’s Fly Jinnah, Y.B. Holdings Pvt., Pak Ethanol Pvt. and real estate consortium Blue World City.
Only one bidder submitted earnest money with the nation’s Privatisation Commission for the auction before the Tuesday deadline, Ahsan Ishaq, the spokesman for the Privatisation Ministry, said by phone.
(Updates with name of bidder in second paragraph.)
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