In a significant development, the Securities and Exchange Commission of Pakistan (SECP) has approved the legal segregation of Pakistan International Airlines (PIA), marking one of the most complex restructuring exercises undertaken.
As per a press release issued by the Ministry of Privatisation on Sunday, the restructuring scheme, endorsed on May 3, facilitates the transfer of PIA’s non-core assets and liabilities to PIA Holding Company Limited.
The press release further indicates that the Pakistan Stock Exchange (PSX), along with the ministries of finance and privatisation, Central Depository Company (CDC), and National Clearing Company Limited (NCCL), have been duly informed about the scheme.
This directive signifies a significant milestone in the collaborative efforts of the Privatisation Commission, Finance Division, aviation ministry, and PIA to revamp the national carrier.
As per the press release, the scheme mandates the PSX, CDC, and NCCL to ensure the smooth listing of PIA Holding Company Limited in compliance with the applicable rules and regulations, effective April 30, 2024.
Regarding the PIA privatisation plan, Pakistan, grappling with a deep economic crisis, committed in June 2023 to overhaul loss-making state-owned enterprises under an agreement with the International Monetary Fund (IMF) for a $3 billion bailout.
Shortly after signing the IMF agreement, the government opted to privatise PIA. The caretaker administration, mandated by the outgoing parliament to meet the budgetary targets agreed with the IMF, initiated this move.
As of June last year, PIA had liabilities amounting to 785 billion Pakistani rupees ($2.81 billion) and accumulated losses of 713 billion. Its CEO has indicated projected losses of 112 billion rupees for 2023.
