KARACHI: The board of directors of Pakistan International Airlines (PIA) has approved the government’s plan to privatize PIA, which is expected to fetch between $250 million and $300 million.
It was the first meeting of the board of directors after its reconstitution on Friday, which approved the government’s plan to privatize PIA by June 15. Also approved.
A financial advisor while briefing the board said that the privatization of PIA would fetch between $250 million and $300 million, but sources said that the estimated amount could be very different after a review by interested parties. That buyers from Qatar or UAE can buy PIA.
In a letter written to the Pakistan Stock Exchange, Company Secretary Rao Muhammad Imran said that the Board of Directors has approved the scheme of arrangement for the privatization and restructuring of PIA in its 83rd meeting to be held on March 25.
Sources say that the caretaker government could not appoint a board of directors due to the interference of the Election Commission, but the new board of directors approved all the decisions of the government in its first meeting, which accelerated the pace of privatisation. The process has been smoothed, however privatization of PIA may still take a long time due to many complications.
PIA spokesperson Abdullah Hafeez Khan said that the board meeting lasted for two and a half to three hours, in which all issues related to privatization and employees were discussed in detail, in which full support was expressed for the government’s privatization plan. And assured that the board will fully cooperate with the government in the privatization of PIA.
According to the government plan, PIA will be run under public-private partnership, for this purpose it has been decided to create a holding company in the Security and Exchange Commission and transfer all the assets and liabilities to the new company. It will be completed in a phased manner. Under the PIA revival plan, the national airline will be repositioned as a loss- and debt-free airline.
Under the plan, PIA will be incorporated into the holding company under a debt-free subsidized re-company, 40 percent of the shares will be sold in the international market to run the national airline under a public-private partnership, and the management will also be outsourced. It has also been decided to hire a foreign consultant to make the restructuring process transparent. In the first phase, the airline will be separated from debt and losses by registering the company with the SEC. While in the second phase, management and shares will be sold through the organization of the national airline and public-private partnership.
According to the document, PIA’s total loss and debt has reached 800 billion, in which 350 billion has been taken as a guarantee loan while 450 billion has been taken as a pledge of the airline’s assets. On the contrary, the national airline’s assets are worth 130 billion rupees. The federal government does not want to restructure the foreign debt, but will try to settle the new interest rate for 10 years.
