The shareholders of PIA Holding Company Limited (PIAHCL) have approved the divestment of a 75% stake in Pakistan International Airlines Corporation Limited (PIACL).
The divestment will be executed through a combination of share transfer and dilution, the PIAHCL said in a notice to the Pakistan Stock Exchange (PSX) on Monday.
Last year, a consortium led by Arif Habib Corporation emerged as the top bidder in a live-televised auction for the 75% stake, offering Rs135 billion ($482.14 million), above the government’s reserve price of Rs100 billion.
The shareholders’ resolution stated that the divestment will occur “through transfer of shares owned by the company and dilution of the company’s shareholding as a result of subscription of shares in PIACL by PIA Equity Limited, strictly in accordance with the transaction documents.”
PIAHCL shareholders also approved a potential future sale of the remaining 25% stake, if PIA Equity Limited exercises its call option under the Share Purchase and Subscription Agreement (SPSA).
The resolution noted that, upon exercise of the call option and satisfaction of required conditions, the company “shall be authorised and obligated to transfer the residual shareholding in PIACL to PIA Equity Limited.”
PIAHCL, majority-owned by the Government of Pakistan, was established to manage specified assets, liabilities, and subsidiaries of PIACL, including its business, property, rights, and obligations.
The privatisation is expected to reshape Pakistan’s aviation sector and foster a more competitive market, according to the Competition Commission of Pakistan.
