The Privatisation Commission (PC) board authorized a transaction structure on Tuesday to sell a minimum 51 percent stake in Pakistan International Airlines (PIA).
The board reconvened and authorized the legal separation of the flag carrier into good and bad PIA, as well as the transaction structure, reported Express Tribune.
Ernst & Young shared PIA’s transaction structure, which includes selling the majority of its shares and dividing the company’s assets and liabilities. The PC board decided to sell at least 51 percent of the stakes, and any foreign buyer will be partnered with a local partner. The financial consultants suggested selling the shares along with management control.
The non-core assets and liabilities will be retained in a holding company.
The total liabilities of PIA have been assessed at Rs. 825 billion, and financial consultants have advised shifting around three-fourths of them to the federal government.
Advisors suggested storing approximately Rs. 640 billion of PIA’s entire liabilities in a new holding company. The money intended to be stored in the new corporation includes the federal government’s debt of Rs. 161 billion and commercial banks’ debt of Rs. 281 billion.
They further suggested transferring Rs. 140 billion in payables from Pakistan State Oil and the Civil Aviation Authority to the new holding firm. The holding firm would also include PIA’s properties and foreign hotels, such as the Roosevelt Hotel in New York and the Scribe Hotel in Paris.
The consultants proposed that approximately $88 million be preserved as key assets, along with the leasing agreements. The financial experts proposed that the federal government pick up the Rs. 83 billion in payments made to the aircraft lessors. They also advised separating the CAA’s Rs. 64 billion debt, PSO’s Rs. 69 billion liabilities, and the FBR’s Rs. 6 billion tax arrears from the core PIA and selling them to investors.
Advisors proposed that the holding company’s approximately Rs. 600 billion debt be covered using the revenues of privatization, the sale of hotels and buildings, and future dividends from excellent PIA.
Sell PIA to private owners. It will make profit as done by five banks after denationalization. This will reduce burden on govt exchequer.
Wesay intehai sust hy commission. Maot nazar ati hy kaam krty huy inko abhi tak privatise nhi kr sky ye jahil