PIA's commercial debt negotiations finalized
The commercial debt negotiations of Pakistan International
Airlines Corporation Limited (PIACL) have reached a successful conclusion,
involving the government, domestic lender banks, and Development Finance
Institutions (DFIs), as part of the entity's restructuring for privatization.
In a statement issued on Friday, PIACL announced that this step
has paved the way for filing the Scheme of Arrangement (SOA) for the legal
segregation of PIACL with the Securities and Exchange Commission of Pakistan on
Thursday. The federal cabinet had previously approved the legal segregation
plan of PIACL on February 6, 2024.
Government
and banks disagree at PIA debt restructuring
The privatization of PIACL has been a key agenda for the federal
government, and these developments mark one of the most intricate restructuring
exercises undertaken to prepare PIACL for privatization. This arrangement aims
to create a viable business proposition for private sector investment in the
national carrier.
Domestic banks and financial institutions have shown strong commitment
to the government's privatization initiative, providing full cooperation in
finalizing the arrangement for PIACL's commercial domestic debt. Under the
arrangement, PIACL's commercial domestic debt will be transferred to PIA
Holding Company Ltd., established by the federal government as part of PIACL's
legal restructuring. A term sheet covering mutually agreed commercial aspects
of the loan transfer was signed between PIACL, PIA Holding Company, and lender
banks.
Government
approves Rs20 billion loan for PIA from banks
To ensure the diligent management of PIA Holding Company's
affairs, a seven-member independent board comprising an ex-State Bank Governor
and prominent leaders from banking and other areas of expertise was notified by
the Federal Government this week. In its inaugural board meeting held in
Islamabad, the new board endorsed the Scheme of Arrangement delineating the
pathway for the privatization of Pakistan International Airlines. Following the
approval of the draft SOA by PIACL and PIA Holding Company boards, the Scheme
of Arrangement for PIACL restructuring was filed with the Securities and
Exchange Commission of Pakistan (SECP) on the same day.
With these significant milestone developments, the calling of
Expression of Interest (EOI) from potential investors for the privatization of
PIACL is planned in the coming days.
Source: Pakistan Observer