Regional
Ahead of election, Pakistan seals plan to sell national airline
Ahead of elections next week, Pakistan’s caretaker administration is making binding plans for a new government to sell loss-making Pakistan International Airlines (PIAa.PSX), opens new tab, according to the minister in charge of the process and other officials.
In the past, elected governments have shied away from undertaking unpopular reforms, including the sale of the flag carrier. But Pakistan, in deep economic crisis, agreed in June to overhaul loss-making state-owned enterprises under a deal with the International Monetary Fund (IMF) for a $3 billion bailout, Reuters reported.
The government decided to privatise PIA just weeks after signing the IMF agreement.
The caretaker administration, which took office in August to oversee the Feb. 8 election, was empowered by the outgoing parliament to take any steps needed to meet the budgetary targets agreed with the IMF.
“Our job is 98% done,” Privatisation Minister Fawad Hasan Fawad told Reuters when asked about the plan to sell the airline. “The remaining 2% is just to bring it on an excel sheet after the cabinet approves it.”
Fawad said the plan, drawn up by transaction adviser Ernst & Young, will be presented to the cabinet for approval before the tenure of the administration ends following the election. The cabinet will also decide whether to sell the stake by tender or through a government-to-government deal, Fawad said.
“What we have done in just four months is what past governments have been trying to do for over a decade,” Fawad said. “There is no looking back.”
Details of the privatisation process have not been previously reported.
PIA had liabilities of 785 billion Pakistani rupees ($2.81 billion) and accumulated losses of 713 billion rupees as of June last year. Its CEO has said losses in 2023 were likely to be 112 billion rupees.
Progress on the privatisation will be a key issue if the incoming government goes back to the IMF once the current bailout programme expires in March. Caretaker Finance Minister Shamshad Akhtar told reporters last year that Pakistan would have to remain in IMF programmes after the expiry.
Two sources close to the process told Reuters that a 51% stake with full management control would be offered to buyers after parking the airline’s debts in a separate entity, under the 1,100 page report from Ernst & Young.
Reuters could not independently confirm the contents of the report. Fawad did not give specific details of the size of the stake to be sold, but confirmed the plan involved the carrier’s debts being spun off into a separate entity.
Ernst & Young did not respond to requests for comment.
PIA spokesman Abdullah Hafeez Khan said the airline was assisting the privatisation process, extending “full cooperation” to the transaction adviser.
Regional
US strikes Iran, Tehran says Strait of Hormuz closed, Gulf states hit
Abbas Araqchi has accused the United States of violating the ceasefire agreement. “There can only be mutual compliance,” he wrote on X on Friday.
The US military launched fresh strikes on Iran after it struck a container ship on Sunday, while Tehran said it had again closed the Strait of Hormuz and escalated attacks on US facilities in states across the Gulf, Reuters reported.
A series of attacks between the US and Iran over the past several days led President Donald Trump to declare the end of a ceasefire meant to halt the fighting that the US and Israel began on February 28, though Trump has left the door open to continued negotiations.
Iran said it closed the strait after firing a warning shot that struck a vessel traveling on an unapproved route. It warned that any retaliation over the incident would be met with a “severe response.”
US Central Command, however, said commercial vessels continue to transit through the waterway that carried one-fifth of the world’s oil and LNG shipments before the war.
Central Command said US forces hit 140 Iranian military targets on Saturday, out of more than 300 during three nights of strikes “to degrade Iran’s ability to attack civilian mariners and commercial vessels freely transiting the strait.”
Iranian state media reported explosions in a number of port cities.
In response, Iran’s Revolutionary Guards said on Sunday they had destroyed a command and control center and drone hangars at a base in US ally Jordan, targeted a US military radar site in Kuwait, attacked US aircraft carrier support and refueling platforms in Oman and destroyed a fighter jet maintenance centre and command and control facility in Qatar.
The Guards also said they had struck and disabled a second vessel in the Strait of Hormuz, read the report.
The United Arab Emirates said its air defense systems engaged missiles and drones from Iran, while warning sirens sounded in Bahrain and explosions were heard in Doha.
Tehran’s strikes marked a sharp escalation in pace and targets. In recent weeks, Iran had hit sites in Kuwait and Bahrain while avoiding Qatar since early April and the UAE since early May.
The war has destabilized the Gulf, while Iran’s effective blockade of the Strait of Hormuz has caused energy prices to surge, fuelling global inflation and raising fears of an economic slowdown.
Higher prices, especially for gasoline, are a politically sensitive issue for Trump ahead of November congressional elections.
Iran said several ships attempted to move through the waterway on an “unauthorized route” and disregarded warnings to correct their course. The strait will remain closed until “the end of US interference in this region,” the Revolutionary Guards said.
Iran’s Foreign Minister Abbas Araqchi has accused the United States of violating the ceasefire agreement. “There can only be mutual compliance,” he wrote on X on Friday.
On Sunday, Iran’s top negotiator Mohammad Baqer Qalibaf posted on X: “The era of one-sided deals is OVER. We told you: keep your word or pay the price. Reality is knocking.”
The US revoked the license authorizing the sale of Iranian crude on Tuesday after three Qatari and Saudi commercial tankers came under fire earlier in the week, prompting the US to hit Iranian sites. Iran then struck US military sites in Gulf states, Reuters reported.
While Iran has not claimed responsibility for the ship attacks, analysts say Tehran uses such actions to gain leverage in negotiations.
Araqchi and Omani Foreign Minister Badr Albusaidi met in Oman to exchange “views on appropriate mechanisms for the safe passage of ships through the Strait of Hormuz,” according to a statement from the Iranian foreign minister. Oman’s state news agency said Omani and Iranian negotiators would continue talks “at the technical and political levels.”
A written statement from Iran’s new supreme leader, Ayatollah Mojtaba Khamenei, on Saturday threatened vengeance for the death of his predecessor and father, who was killed in the war’s initial attacks. It said the vengeance would take place whatever happened to Iran.
“We pledge to avenge the blood of the martyred leader and all the martyrs,” the message said.
The statement was released to mark funeral ceremonies for the former leader, Ayatollah Ali Khamenei, on Thursday. His son did not attend the ceremonies and has not been seen in public since the war began.
Regional
Iran’s Supreme Leader vows revenge for father’s death
Iran’s Supreme Leader Ayatollah Mojtaba Khamenei said on Saturday that avenging his slain predecessor and father was “the demand of the nation” and “must certainly” take place, according to a written message published on the official website of Ayatollah Khamenei.
Khamenei issued the message on the occasion of funeral ceremonies for his father, Ayatollah Ali Khamenei, held months after he was killed in the U.S.-Israeli airstrikes on February 28.
“We pledge to avenge the blood of the martyred leader and all the martyrs of these two wars from the criminal and disgraced killers,” Khamenei said in the message.
“The criminals will take their dream of a peaceful death in bed to the grave with them,” he added.
Mojtaba Khamenei also expressed appreciation for the attendance of tens of millions of mourners from Iran and Iraq.
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