Pakistan's airline PIA sold to Indian-origin businessman for ₹4,300 crore: what's the connection?

Islamabad (The Uttam Hindu) : Amid economic hardship and a $7 billion reform program from the International Monetary Fund (IMF), the Pakistani government has sold a 75% stake in its loss-making national airline, Pakistan International Airlines (PIA), to the private sector. In a televised auction, Pakistan International Airlines Corporation Limited was purchased by Arif Habib's company for 135 billion Pakistani rupees, or approximately 4320 crore Indian rupees.

How was the bidding conducted, and how much was received?

The Pakistan government had estimated the purchase price of PIA at ₹3,200 crore, but the Arif Habib Group surpassed the estimated price to acquire it. This auction is considered a major step in Pakistan's privatization agenda, which the IMF has long pushed for.

What did the government do to make PIA "attractive"?

According to a Financial Times report, to attract investors, the government transferred a large portion of PIA's massive debt of approximately 800 billion rupees to a separate entity. About 670 billion rupees was placed in a separate holding structure.

Arif Habib is one of the largest brokerage companies in Pakistan. It also manages major companies like Fatima Fertilizer, City Schools, and Lake City Holdings. After starting with brokerages, the company entered the steel, real estate, and banking sectors. The group's main company, Arif Habib Limited, provides stock market investment and banking services. Fatima also operates fertilizer businesses through the group. Ayesha Steel operates in the steel and cement businesses. Javedan Corporation operates in the property business. Furthermore, it also operates in various countries around the world with global companies like Mitsubishi and Metal One.

It's worth noting that while Arif Habib may be a prominent Pakistani businessman today, his roots are rooted in India. Habib's family is from Junagadh, Gujarat. After Partition in 1947, the Habib family moved to Pakistan. They had a tea business in Gujarat, which they abandoned and moved to Karachi. In 1970, Arif Habib began working as a broker at the Karachi Stock Exchange. He later became its chairman and later founded the Arif Habib Group. His personal wealth is estimated to be around $500 million.

With 32 aircraft, this airline is Pakistan's largest aviation company. It operates on more than 28 routes worldwide and has a debt of over ₹80,000 crore (₹80,000 crore). The company's valuation is ₹56,440 crore (₹56,440 crore). It holds a 19% share of Pakistan's aviation market, operating 70 to 80 flights daily. The company has over 9,800 employees.