PIA sell-off: PC kicks off process of picking financial adviser

Five consortia give presentations; each must have a communication strategy firm.

Shahbaz Rana July 01, 2014


As the government formally begins the process of hiring a financial adviser to sell its stake in Pakistan International Airlines (PIA), it has decided to pick a communication strategy firm as part of a consortium of advisers to meet the expectations of stakeholders.

Five international consortia, which were vying for appointment as the adviser, gave presentations to the Privatisation Commission (PC) on Tuesday.

Every consortium must have a communication strategy firm in its fold, which can frame a plan on how to manage expectations of people with the aim of carrying out PIA privatisation smoothly.

The government is facing resistance from opposition parties, particularly the Pakistan Peoples Party, which is opposed to the privatisation of PIA and Pakistan Steel Mills.

The PPP during its five-year stint hired thousands of loyalists in these state-owned enterprises and now wants to protect them.

The financial adviser will prepare a restructuring plan, resulting in partnership with the private sector in core operations of PIA. Separately, the government will hire a financial adviser to sell PIA’s two hotels in New York and Paris.

Under the $6.7-billion International Monetary Fund loan programme, Pakistan has committed to selling 26% shares in PIA to strategic investors. Initially, the deadline was June 2014, which has now been revised to June 2015.

The government was supposed to hire a financial adviser by December 2013, but the deadline was revised twice to June 2014. This target has also been missed.

“In the next two weeks, the Privatisation Commission will be able to hire a financial adviser for the strategic sale of PIA,” commented Mohammad Zubair, Chairman of the commission.

He said he was pretty comfortable with the consortia and an evaluation committee, responsible to recommend a consortium to the PC board, would now assess the technical and financial bids.

Zubair said PIA’s sell-off was not as simple as many believed and the adviser would have to do a lot of work including meeting expectations of all stakeholders.

The adviser will come up with a report on the technical and financial aspects of PIA after conducting due diligence.

Five international consortia have responded to the government’s advertisement. The first consortium comprises Jefferies – an international investment bank, ICF SH&E, which has been rebranded recently as ICF International, Shajar Capital, Charles Russell of the United Kingdom, Irfan & Irfan, BDO Ebrahim, Aon Hewitt and Consulum.

ICF International is a leading provider of consulting services and technology solutions. Consulum is an international communication strategist.

The second consortium includes McKinsey, MCB Bank, RIAA and Deloitte. The third consortium consists of EY of the UK, Seabury – a global advisory and investment bank, Haidermota BNR, Freshfields Bruckhaus Deringer, UBL, Excelerate and Mediators Private Limited.

The fourth consortium includes Rothschild – a financial advisory group, Oliver Wyman – an airline economic analysis firm, Mercer Consulting, Khalid Majid Rehman, Hassan Kaunain Nafees – a legal firm and Pinetree Capital.

The fifth consortium comprises Dubai Islamic Bank, IATA Consulting, which has expertise in aviation business, Deloitte, Haidermota BNR, Freshfields Bruckhaus Deringer, Abacus Consulting, APCO – a communication strategy firm and Prestige.

Published in The Express Tribune, July 2nd, 2014.

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Honey | 7 years ago | Reply Your country have also in financial losses from last many years like PIA, so they also for sale the same. When your country will be in good manner then obviously all government institutions also have good service and good financial health.
Rumormonger | 7 years ago | Reply

The govt should auction PIA through one of those game shows that are rampant over TV these days.

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