In a crucial move, the Privatisation Commission (PC) board, led by Federal Minister for Privatisation Fawad Hasan Fawad, has given the nod to an Ernst & Young-led consortium for crafting a privatisation plan for Pakistan International Airlines (PIA). This decision comes as the government accelerates its efforts to sell the financially struggling entity by the end of February.

The PC board’s decision represents the achievement of a significant milestone, with some details to be ironed out by a negotiation committee, including matters related to success fees and adherence to deadlines. The actual fee will be finalized upon agreement with the selected firm.

Eight interested parties submitted technical and financial proposals, with Ernst & Young’s consortium emerging as the top-ranked interested party based on laid-down criteria. The board has formed a negotiating committee to finalize a financial services agreement with the leading bidder.

Among the qualified firms in the technical round were Rothschild & Co, Houlihan Lokey, and Ceabury Securities, along with Haidermota, a partner of Dubai Islamic Bank (DIB), previously involved in a comprehensive assessment of PIA. The new financial adviser is tasked with updating the DIB study and preparing PIA for sale in approximately two months.

The interim government aims to split PIA into two entities, with core assets slated for sale by the end of February. Despite some outstanding issues, the negotiation committee is set to address them during engagements with the consortium before finalizing the financial advisory services agreement.

In a commitment to the International Monetary Fund (IMF), the privatisation ministry has emphasized that PIA’s privatisation is a top priority, with efforts to complete it at the earliest possible time. PIA, facing significant losses, incurred Rs86 billion last year, and this year’s estimate is a staggering Rs153 billion, prompting the consideration of selling at least 51% shares along with management control.

Additionally, the board has extended the financial advisory contracts of two firms previously engaged in the privatisation of the House Building Finance Company (HBFC) and the First Women Bank Limited (FWBL).