Seven international investors have shown interest in purchasing Pakistan’s national airline, Pakistan Internationa Airlines (PIA).
As per sources, countries including Germany, France, the Netherlands, Qatar, the United Arab Emirates, Malaysia, and Turkey have shown interest in Pakistan International Airlines. Several local groups are also interested in this transaction.
The international financial advisor, Ernst & Young, has also given its estimate for privatising the national air company, revealing the expected sale price of Pakistan’s national airline.
Ernst & Young estimates the revenue from the institution’s sale to be between $250 million and $300 million (69 billion PKR to 83 billion PKR).
Sources say investors from seven countries are interested in purchasing PIA, with the United Arab Emirates or Qatar potentially successful in acquiring the majority shares. The PIA board hopes to complete the privatization process by June 15.
It is also hoped that the PIA’s sales process will be completed before the next loan program from the IMF. Two days ago, the PIA Board of Directors approved the restructuring and privatization of the institution.
A major hurdle in privatizing the national airline PIA has been cleared, with agreements settled with banks regarding assets mortgaged by PIA and a term sheet agreed upon. Banks are expected to issue an NOC this week, which will return the assets to the national airline, allowing for privatization.
According to sources, the bank’s loan will not be repaid for up to 10 years, and a profit rate of 12% will be given. The loan will be repaid from dividends once the institution becomes profitable.
Initially, 51% of PIA’s shares will be privatized, with the proceeds from privatization to be spent on PIA’s revival. The party purchasing PIA will have to invest 51%.
The PIA Board of Governors has proposed retiring employees with four years left in their service in case of the institution’s privatization. The PIA Board of Governors has given the green signal to the government for privatization. In a 4-hour-long advisory meeting, the new Board of Directors of the national airline discussed matters related to privatization and considered proposals regarding the employees’ future.
According to sources, the meeting proposed retiring employees with four years left while also discussing a voluntary retirement scheme. Before privatising the national airline, the government had created aviation and holding companies.
Before privatization, all loans will be paid by the government, which does not want to restructure foreign loans of 88 million dollars but is trying to settle the loan at a new interest rate for 10 years. Meanwhile, PIA’s local loans will be transferred to the holding company.”
