The evaluation committee included two members of the Board, Secretary, Director General and representatives from Ministry of Finance and concerned ministries. A spokesman for the PC said that various local and international consortia bid for FAs and sale of PIA and Fesco shares and five consortia were selected for presentation of each transaction. He said the evaluation committee finalised its recommendations on the selection of FAs which will likely be put up in the upcoming board meeting. The 12-member board will approve one consortium for each transaction.
Under the $6.4billion International Monetary Fund (IMF) programme, the government had agreed to appoint a financial adviser for privatisation of PIA by end-March and divest 26 per cent shares of PIA to a strategic investor by end-December 2014. Though the appointment of financial adviser was later revised to June 2014, the government missed the target again. Now it is expected to finalise the name by end of July 2014. Senior officials at PC told Business Recorder that PIA Board meeting will be held on July 22 where approval of the appointment of financial adviser would be accorded with terms of reference to prepare a comprehensive restructuring plan and seek a potential strategic private sector participation in the company. After the appointment of a financial adviser, the restructuring and privatisation process would gain momentum.
According to a Letter of Intent (LoI) agreed with IMF, the government has committed to continue its restructuring plans and hire professional chief executives and board members for enterprises with a corporate structure in line with the corporate governance rules. It further states that the government is developing medium-term action plans to restructure PIA, Pakistan Steel Mill (PSM) and Pakistan Railways (PR). Specifically for PIA a financial adviser would be appointed by end-June 2014 (structural benchmark) to seek potential options for restructuring and strategic private sector participation in the company. In the meantime, PIA will continue leasing more efficient airplanes and rationalising routes. Five consortia in the run for the purchase of Fesco, whose credentials were evaluated, include BMA, consortium of UBL and EV, consortium of SSJBL and Burj Power, consortium of Almal Capital and consortium of Grant Thornton.
Five international consortia have responded to the government's advertisement for the post of financial adviser for PIA. The first consortium comprises Jefferies - an international investment bank, ICF International, Shajar Capital, Charles Russell of the United Kingdom, Irfan & Irfan, BDO Ebrahim, Aon Hewitt and Consulum. 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.