Pakistan assures IMF of PIA sale by July amid privatisation push

Pakistan has assured the International Monetary Fund (IMF) that it will complete the sale of Pakistan International Airlines (PIA) by July, following a failed attempt last year, according to a media report on Tuesday.

The national carrier has been struggling with heavy losses, and its privatisation is part of the economic reforms suggested by the IMF. The government has put up for sale a stake ranging from 51% to 100%. However, the last attempt to sell PIA in October 2024 failed due to a lack of serious buyers, with the only bid—Rs 10 billion from a local real estate developer—being rejected.

An IMF team is currently in Pakistan to review the country’s $7 billion loan programme. Pakistan needs to convince the team of its economic reforms to secure the next tranche of about $1 billion. One of the key concerns of the lender is the continued losses of state-owned enterprises, including PIA.

During a briefing to the IMF, the Privatisation ministry informed the delegation that the government plans to privatise five to seven entities, including three financial institutions and three power distribution companies, by the end of the year. Officials set a July 2025 deadline for selling PIA and are currently assessing market interest before formally inviting investors later this month.

Authorities have expressed caution over the success of this second attempt, as the government is still evaluating investor confidence in acquiring a loss-making airline. However, three parties have reportedly shown interest in bidding, including two that withdrew last year due to concerns over sales tax on leased aircraft and PIA’s Rs 45 billion liabilities. The IMF has now agreed to relax these conditions, alongside reopening European flight routes, in hopes of attracting buyers.

Pakistan has also assured the IMF that it plans to sell three power distribution companies—Faisalabad, Islamabad, and Gujranwala—by December. The final decision on whether to sell them together or separately will be made based on advice from financial experts.

Additionally, officials stated that the United Arab Emirates is interested in acquiring First Women Bank Limited as a full commercial bank, with the deal expected to be finalised by May. However, the UAE prefers a direct government-to-government agreement rather than an open bidding process.

The government is also in the process of hiring financial advisers for the sale of Zarai Taraqiati Bank Limited, which it hopes to sell by November, and House Building Finance Company, which it expects to offload next month after several missed deadlines.