Pakistan on Monday announced the first closing of the divestment of the Pakistan International Airlines Corporation Limited (PIACL) through privatization and transfer of its management control to a consortium led by Arif Habib Corporation, following satisfaction of all conditions under the Share Purchase and Subscription Agreement (SPSA). The airline, which had accumulated more than $2.8 billion in losses over the years, was privatized in December 2025 after the consortium agreed to acquire a 75 percent stake for Rs135 billion ($482 million) after a competitive bidding process that valued the carrier at Rs180 billion ($643 million).
Conditions Precedent Completed
The government completed a challenging set of conditions precedent under the SPSA since January, including regulatory approvals, lessors and commercial consents, aviation policy reforms, corporate approvals, restructuring of taxation relating to legacy liabilities, aircraft financing arrangements, governance changes, and tax-related matters, according to the Privatization Commission.
First Closing Payments and Equity Injection
Under the first closing, the consortium paid Rs10 billion ($36 million) to the government as sale proceeds, and injected Rs80 billion ($288 million) into PIACL as fresh equity to strengthen the airline’s financial position, support fleet expansion and modernization, expand its route network, and enhance operational performance and customer service.
“This transaction demonstrates Pakistan’s ability to execute complex strategic transactions through a transparent, fair, competitive and professionally managed process,” said Muhammad Ali, an adviser to the prime minister on privatization. “It reinforces the Government’s commitment to economic reform, fiscal responsibility and greater private-sector participation while strengthening confidence among domestic and international investors.”
Total Investment Commitment
The bidding process, held on December 23, led to a total investment commitment by the consortium of Rs180 billion ($643 million), out of which Rs55 billion ($197 million) will be paid to the Pakistani government for the sale of PIA and Rs125 billion ($449 million) are to be injected into the airline to support its long-term transformation and to revive the national carrier to its past glory, according to the Privatization Commission.
Second Closing and Call Option
The second closing is scheduled to take place within 12 months of the first closing, in accordance with the terms of the SPSA, whereby the consortium has committed to invest a further Rs45 billion ($161 million) into PIACL. The consortium has also served its intent to buy the remaining 25 percent of the PIACL shares as a call option under the SPSA for an additional payment of Rs45 billion ($161 million) to the government.
“The Government remains committed to protecting the interests of employees, passengers and consumers while ensuring a smooth transition and uninterrupted airline operations. All applicable aviation laws and regulatory oversight will continue to apply,” the Privatization Commission said.
