Pakistan's government has further reduced its stake in national carrier Pakistan International Airlines (PIA) through a secondary share offering. The country's Privatisation Commission originally said it was offering up to 10% of PIA's shares for sale to domestic and overseas Pakistani investors. However, midway through the 7-9 June subscription period it announced that only another 5% would be sold.
The offer stood to raise Rp1.15 billion ($164 million) if the share offer was fully subscribed at the Rp20 asking price. PIA's first public share offering was held in 1990, but 87% of the carrier had remained in state hands until this latest secondary offering. The Pakistan government had decided on the latest offering as part of a broader plan to reduce state ownership of key assets. It also said that the public should share in the success of the national airline, which has been restructured in recent years with a revamp of its route network and fleet.
The Privatisation Commission adds that over the past three fiscal years PIA has demonstrated "remarkable financial performance, registering significant growth in sales, profitability and cashflows", thereby making it an attractive investment. For its first quarter to March, however, the carrier recorded a 25% fall in net profits to Rp833 million, despite a 12% increase in revenues to reach Rp14.6 billion.
In other news, PIA is planning to enter into a codeshare deal with China Southern, its first with a Chinese carrier. It flies from Islamabad and Karachi to the Chinese capital Beijing.
Source: Airline Business
