Ernst & Young Chosen to Advise on Partial Privatisation of Pakistan’s PIA

The Pakistani government has selected Ernst & Young, a multinational business consultancy firm, to lead a consortium as its financial advisor for the partial privatisation of PIA – Pakistan International Airlines. The announcement follows a meeting of the Privatisation Commission Board, during which the consortium led by Ernst & Young was declared the top-ranked interested party.

Ernst & Young will play a crucial role in creating a transaction structure to facilitate the partial privatisation of PIA. The government aims to hive off the airline’s debt into a separate entity and establish a public-private partnership, with a foreign airline expected to take a 40% stake in PIA in exchange for significant equity and day-to-day control.

The consortium selection followed a competitive process, with eight entities and consortiums submitting technical and financial bids for the privatisation assistance role. The winning Ernst & Young-led consortium includes Bauer Aviation Advisory, Haidermota & Co, Freshfield Bruckhaus Deringer, Nutshell, and Knight Frank. The government hopes to finalize the financial services agreement with Ernst & Young and receive a preliminary report by January 2024.

Despite these developments, reports suggest a meeting between senior government officials and the International Monetary Fund (IMF) indicated a delay in the privatisation of state-owned entities until after the next general election. While Pakistan is currently in caretaker mode until the completion of a national census and redrawing of constituency boundaries, the Privatisation Minister remains optimistic about completing the PIA partial privatisation by the end of Q1 2024. Stay tuned for further updates on this evolving situation.