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Overseas Pakistani group Al Nihang offers to acquire debt-ridden Pakistan International Airlines
Al-Nihang, an overseas Pakistani group has offered to acquire Pakistan International Airlines for the cost of PKR 100 billion amid a set of terms and conditions, Ary News reported.
The bid for privatisation by Al-Nihaang comes days after both the Khyber Pakhtunkhwa and Pakistan's Punjab state governments had offered to acquire the airlines. According to Ary News, the group wrote an offer letter to Pakistan's Ministers of Privatisation, Aviation and Defence amongst other authorities and outlined its proposal to acquire complete ownership of the PIA.
The key points of Al-Nihang's offer are described below. As per Ary News, Al-Nihang Group said that it will acquire the full shareholding of PIA in accordance with the terms outlined in the tender proposal, assuming comprehensive ownership.
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Al Nihang has also offered to pay off PIA's PKR 250 billion debt. The Express Tribune had previously reported that PIA has been under a massive debt burden of approximately USD 2.9 billion. Despite multiple bailout packages being provided to it by the government in recent years, PIA is struggling to stay afloat. Al Nihang's offer amid this background comes as a breather to the airlines. The group has also said that there will be no employee layoffs and instead offered a 100% increase in salaries over 30 months.
As per Ary News, the Business Plan the introduction of modern aircraft to PIA's fleet and the group has proposed establishing PIA as an engineering and maintenance hub for other airlines.
These developments came days after the Khyber Pakhtunkhwa government expressed interest in participating in the PIA privatization bidding. According to details, the KP Investment Board wrote to Federal Minister for Privatization Abdul Aleem Khan, expressing its intention to submit a bid.
Earlier, Pakistan Muslim League-Nawaz (PML-N) President Nawaz Sharif said that Punjab Chief Minister Maryam Nawaz advised him to buy Pakistan International Airlines (PIA) and rebrand it 'Air Punjab.'
According to Ary News, in a statement, Nawaz Sharif said, "Maryam sought advice from me, asking if we should take over the PIA and make it a brand new airline."
Meanwhile, the final bidding process for the PIA privatization saw just one bid of PKR 10 billion ($36 million) for a 60 per cent stake in the national flag carrier.
According to sources, the Pakistan government had pre-qualified six groups in June, but only real-estate development company Blue World City participated in the bidding process, placing a bid that was below the government-set minimum price of PKR 85 billion. The government is aiming to privatize the airlines with six bidders pre-qualified for the sale.
This privatisation effort is in line with the recommendations given by the International Monetary Fund (IMF) to the Government of Pakistan to sell off all loss-making state-owned enterprises so as to stabilise the economy. The recent accidents make it tough for the company to gain trust during a time when it is causing heavy burdens to the national exchequer.
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