ISLAMABAD: The privatization of Pakistan International Airlines (PIA) has been delayed by pending legal and regulatory requirements, with officials telling lawmakers on Wednesday the transaction cannot be completed until a series of conditions agreed between the government and the buyer are fulfilled.
The delay affects the first stage of the transaction, known as the first closing, under which an Arif Habib Group-led consortium agreed to acquire a 75 percent stake in the former national carrier for Rs135 billion ($482 million), one of the country’s most closely watched privatization transactions.
The former national carrier was privatized in Dec. 2025 after a competitive bidding process that valued the airline at Rs180 billion ($643 million). The sale marked a major step in Pakistan’s efforts to offload loss-making state-owned enterprises, with PIA having accumulated more than $2.8 billion in losses over the years.
Officials from the Privatization Commission and the Ministry of Defense said a number of Conditions Precedent (CPs) remain outstanding. These are legal, regulatory and administrative requirements that both the government and the buyer must complete before ownership and management can formally change hands.
“The process is still pending till today as one of the CPs was to repeal PIAC Conversion Act 2016, a law that establishes government control over PIA,” Defense Secretary Lt. Gen. (r) Muhammad Ali told a Senate committee.
“The buyers want this act to be repealed as per agreement so that PIA’s assets and controls could be transferred to its new management.”
The defense secretary said the Share Purchase and Subscription Agreement, or SPSA, was signed on Jan. 29 and set Apr. 29 as the initial target for the first closing, when both parties were expected to complete their obligations under the agreement.
However, several requirements remained outstanding on both sides by that date, prompting the parties to move the target to May 25. That deadline also passed without parliament approving legislation required under the agreement.
He said a temporary ordinance had been issued to address one of the outstanding requirements, though it required parliamentary approval to become permanent law.
The Senate committee discussed the proposed legislative changes, with some members seeking greater clarity on the future status of PIA employees after the transaction is completed.
Lawmakers were informed that the PIA brand name would remain unchanged under the new ownership structure, though future corporate decisions would be governed by regulations of the Securities and Exchange Commission of Pakistan.
The committee deferred consideration of the draft legislation and asked the government to make required changes before bringing it back on Monday.
A senior Privatization Commission official said the consortium has so far paid Rs5 billion ($18 million), while approximately Rs85 billion ($305 million) remains payable at the first closing.
“The government has not given administrative control to the consortium so it is hoped that the payment of Rs85 billion will be made once the government side completes the handover,” the official said, requesting anonymity.
Arif Habib, chief executive of the group, did not respond to requests for comment.
The consortium has already said it intends to acquire the remaining 25 percent stake in the airline, potentially paving the way for full private ownership.
Privatization Commission spokesman Imran Ghaznavi said the remaining requirements were nearing completion and expressed confidence that the transaction would move forward this month.
“Arif Habib Consortium will be depositing the balance amount of approximately Rs85 billion required under the agreement at first closing,” he said.
“25th May 2026 was a tentative date by which time it was agreed that the required Conditions Precedents, including international and domestic regulatory formalities, lessors consent and approvals would be completed.”
Ghaznavi said more than 40 conditions and pre-completion obligations had been identified under the agreement and that most had already been fulfilled, with the remaining approvals and documentation expected to be completed in the coming days.
“The Consortium has confirmed the availability and readiness of their funds,” he added. “After completion of CPs expected in the next few days, the first completion is expected to happen within June.”
Ghaznavi said the first closing would trigger the transfer of shares and payment of the remaining amount due under the agreement, bringing the privatization of Pakistan’s national carrier a step closer to completion.
