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(Bloomberg) — Pakistan received only one final bid to buy a majority stake in the national flag carrier Pakistan International Airlines Corp., a significant sale for the country that has failed multiple times in the past.
Blue World City submitted the final bid that will be opened at 6:30 p.m. local time, according to the bidding process in Islamabad. The real estate group was one of the six bidders shortlisted by Pakistan authorities but the other five groups decided to stay away.
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Prime Minister Shehbaz Sharif’s cash-strapped government is trying to shore up the nation’s debt-ridden economy by selling loss-making state-owned enterprises that include the national airline, Roosevelt Hotel in New York and energy utility companies. The government has failed to privatize the airline in previous attempts because of protests by labor unions and political parties.
The winning bidder would need to invest $500 million in five years into the loss making carrier, Privatization Commission Secretary Usman Bajwa said in August. The airline has not made a profit in almost two decades and had to scale back operations in May last year after running short of funds to pay for fuel. It is only able to operate because of regular bailouts from the government.
Blue World City plans to include Chinese and Turkish investors in its deal that have expertise in aviation, Chairman Saad Nazir told Bloomberg by phone earlier this week. The group will bid for a 60% stake in the airline, he had said. The government has decided to retain the remaining stake, he said.
Pakistan moved 73% of the airline’s total debt 830 billion rupees ($2.98 billion) debt to its books for the sale to happen. Ernst & Young LLP is the financial adviser for the transaction
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