The Privatisation Commission of Pakistan has successfully completed the First Closing of the divestment of Pakistan International Airlines Corporation Limited (PIACL), transferring management control of the national carrier to an investor consortium led by Arif Habib Corporation Limited. The milestone was achieved after all conditions precedent under the Share Purchase and Subscription Agreement (SPSA) were satisfied, according to an official press release.
Historic Milestone in Economic Reform
Prime Minister Muhammad Shehbaz Sharif welcomed the First Financial Closing, describing it as a historic milestone in Pakistan's privatisation history. He stated that the successful completion of the PIA privatisation transaction demonstrates the government's ability to deliver complex, strategic transactions transparently, competitively, and on time through a whole-of-government approach.
"The successful completion of the First Closing of the PIA privatisation transaction is a moment of real satisfaction for my government and for the people of Pakistan," said Prime Minister Shehbaz Sharif. He added that the achievement opens a new chapter for PIA and the broader economic reform agenda, sending a strong signal to domestic and international investors that Pakistan is open for business and committed to reform.
Details of the Transaction
The bidding process, held on 23rd December 2025, resulted in a total investment commitment of Rs. 180 billion from the consortium. Of this, Rs. 55 billion will be paid to the Government of Pakistan for the sale of PIACL, and Rs. 125 billion will be injected into the airline to support its long-term transformation. Under the First Closing, the consortium has already completed Rs. 10 billion in sale proceeds to the government and Rs. 80 billion in fresh equity into PIACL to strengthen its financial position, support fleet expansion and modernisation, expand its route network, and enhance operational performance and customer service.
The Second Closing is scheduled within twelve months of the First Closing, with the consortium committing to invest a further Rs. 45 billion into PIACL. The consortium has also expressed its intent to buy the remaining 25% of PIACL shares as a call option under the SPSA for an additional payment of Rs. 45 billion to the government.
Government Support and Acknowledgements
Prime Minister Shehbaz Sharif commended the role of Deputy Prime Minister Mohammad Ishaq Dar, Finance Minister Muhammad Aurangzeb, Advisor on Privatisation Muhammad Ali, and members of the Cabinet Committee on Privatisation and the Privatisation Commission. He also paid tribute to Field Marshal Syed Asim Munir and his team for their teamwork. The prime minister emphasised that the government remains committed to protecting the interests of employees, passengers, and consumers while ensuring a smooth transition and uninterrupted airline operations, with all applicable aviation laws and regulatory oversight continuing to apply.
Conditions Precedent Completed
Since the execution of the SPSA on 29th January 2026, the Privatisation Commission and other government stakeholders, including the Ministry of Defence, completed a challenging set of conditions precedent within an exceptionally compressed timeframe. These included domestic and overseas regulatory approvals, lessor and commercial consents, aviation policy reforms, corporate approvals, restructuring of taxation-related legacy liabilities, aircraft financing arrangements, governance changes, tax-related matters, airport infrastructure arrangements, and the provision of transaction security by the investor consortium. The process maintained uninterrupted airline operations, preserved critical commercial relationships and aviation certifications, protected employees' interests, and ensured continuity of services for passengers.
Advisor's Remarks
Advisor to the Prime Minister on Privatisation, Muhammad Ali, said: "This transaction demonstrates Pakistan's ability to execute complex strategic transactions through a transparent, fair, competitive and professionally managed process. It reinforces the Government's commitment to economic reform, fiscal responsibility and greater private-sector participation while strengthening confidence among domestic and international investors."
Khurram Shehzad, advisor to the Finance Minister, hailed the successful completion of PIA's privatisation as a landmark milestone in the country's reform agenda, stating that the transaction—the largest privatisation deal in Pakistan's history—sends a powerful signal to global investors about the government's commitment to private sector-led growth and structural reforms.
