In June 2026, management control of Pakistan International Airlines Corporation Limited (PIACL) passed to PIA Equity Limited, completing Pakistan’s first major privatisation in nearly two decades. A consortium led by Arif Habib Corporation and including Lake City Holdings had won the December 2025 auction, with a PKR 135 billion bid securing a 75% stake.
Behind the headline sat a financing question: how to fund an acquisition of this scale on a fully Shariah-compliant basis. Bank AL Habib Limited provided approximately PKR 5 billion in Islamic finance facilities to Lake City Holdings (Private) Limited. The facilities comprised funded financing and a non-funded standby letter of credit. They part-funded the acquisition, through PIA Equity Limited, of up to a 16.33% shareholding in PIACL under the PIA privatisation. RIAA Barker Gillette acted as legal counsel to the Bank, advising on the financing structure and drafting and negotiating the financing agreements and security documents, including mortgage deeds. The firm also assisted with satisfying and certifying the conditions precedent.
“The PIA privatisation shows how Islamic finance can fund transactions of national significance,” said Bilal Shaukat, Managing Partner. “As Pakistan moves towards a riba-free banking system by 2028, Shariah-compliant structures will increasingly anchor the country’s largest acquisitions.”
The wider policy setting reinforces that trajectory. The Twenty-Sixth Constitutional Amendment requires the complete elimination of riba by 1 January 2028. In parallel, the State Bank has made the transition to Shariah-compliant banking a strategic goal, and Islamic institutions already hold a growing share of the sector’s assets. Meanwhile, the PIA privatisation has re-opened the pipeline for further state divestments. Together, these currents point to Islamic structures featuring prominently in the acquisition financings to come. The practical test will be documentation: security packages, undertakings and conditions engineered for Shariah compliance without diluting lender protection.
Bilal Shaukat (Managing Partner – Pakistan) led the team, which included Ahmed Mohid (Associate – Lahore).
For more information on Islamic banking and finance transactions, contact Bilal Shaukat today.
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RIAA Barker Gillette is Pakistan’s premier law firm, with an on-the-ground presence in three major cities in Pakistan: Karachi, Islamabad and Lahore, and affiliated offices in Dubai (DIFC) and London.
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