Pakistan's government has decided to sell a further 10% stake in Pakistan International Airlines (PIA) and will be offering the shares to private and institutional investors.
"Currently 87% of the total shares of the airline are owned by the government, but 10% is planned for divestment," says an official in the capital markets division of Pakistan's Karachi-based privatisation commission.
He adds that the public offering is scheduled to occur over 7-9 June and will be open to private and institutional investors.
The government plans to cut its 87% stake because it wants to reduce its involvement in some sectors of the economy, according to the official. He also says that because PIA is profitable, the share offer is a way for the government to permit the public to benefit from the airline's improving financial performance.
Several other government businesses have also been earmarked for partial privatisation, says the official, who adds that 90% of funds generated from privatisations will be used to retire the country's debt while the rest will be used to help the poor.
KASB Securities - a Pakistani associate company of Merrill Lynch - has been appointed financial advisor on the latest PIA share offer, says the official.
In 1990 the government sold a 13% stake in PIA and listed the business on the Karachi Stock Exchange, he adds.
PIA in the first quarter of this year recorded a 25% year-on-year drop in net profit, to Rs833 million ($14 million) from Rs1.1 billion. In recent months it has been taking delivery of new Boeing 777s and is expanding its international passenger network.
Source: Flight International
