Islamabad: Pakistan on Tuesday successfully completed the privatisation of its national flag carrier, Pakistan International Airlines (PIA), selling it for Rs 135 billion to a consortium led by local investment firm Arif Habib.

The privatisation ceremony was held in Islamabad, where three pre-qualified bidders — Lucky Cement, private airline Airblue and Arif Habib — submitted sealed bids in the first phase of the process. In the second phase, the bids were opened, with Arif Habib emerging as the highest initial bidder at Rs 115 billion, followed by Lucky Cement at Rs 105.5 billion and Airblue at Rs 26.5 billion.

Following the opening of bids, the government announced a reference price of Rs 100 billion. In line with the rules, the two highest bidders were invited to participate in an open auction. After a competitive round of bidding, the Arif Habib-led consortium raised its offer to Rs 135 billion, which remained unmatched.

“We congratulate the Arif Habib group,” a representative of Lucky Cement said while conceding to the higher bid.

Under the privatisation terms, the government initially offered a 75 per cent stake in PIA, with the successful bidder given 90 days to acquire the remaining 25 per cent shares. Of the proceeds from the sale of the initial stake, 92.5 per cent will be allocated to PIA for reinvestment, while 7.5 per cent will go to the government.

The winning investor is also required to commit Rs 80 billion in investment over the next five years. Ahead of the privatisation, the government had assumed responsibility for PIA’s liabilities, amounting to Rs 654 billion, last year.

The entire bidding process was broadcast live on local television channels to ensure transparency. This was the government’s second attempt to privatise the airline after an earlier effort last year failed to secure the desired price.

Earlier, Prime Minister Shehbaz Sharif thanked government officials and the Privatisation Commission for their efforts, describing the transaction as “transparent” and the “largest” of its kind in Pakistan’s history.

Once regarded as one of the world’s leading airlines, PIA has seen its services and reputation decline over years of mismanagement, prompting the government to pursue privatisation as a last resort.