PIA's restructuring pan okayed by SECP
The Securities and Exchange Commission of Pakistan (SECP) has
given its approval to the restructuring plan of Pakistan's national airline, as
confirmed by the privatization ministry on Sunday. This marks a significant
step in the government's efforts to privatize the struggling entity.
Pakistan, in an agreement with the International Monetary Fund
(IMF) last year, committed to revamping its loss-making state-owned enterprises
(SOEs), including Pakistan International Airlines (PIA). The decision to
privatize PIA was made shortly after finalizing the IMF deal.
Read More Commission
grants Holdco the acquisition of full ownership of PIA
The privatization process has faced numerous challenges over the
years, including political hurdles and legal complexities. To expedite PIA's
privatization, the government established PIA Holding Company (Holdco) in
March, tasked with managing the airline's liabilities and facilitating its
transfer to potential investors.
On May 4, the Competition Commission of Pakistan (CCP) approved
PIA's acquisition by Holdco, deeming it to have no significant impact on the
market. Subsequently, the SECP has green-lighted the transfer of PIA's non-core
assets and liabilities to Holdco.
The privatization ministry hailed this development as a
collaborative effort between the Privatization Commission (PC), Finance
Division, Aviation Ministry, and Pakistan International Airlines to restructure
the national carrier.
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and lender banks finalize PIA's commercial debt negotiations
SECP's directive to ensure Holdco's smooth listing has been
conveyed to the Pakistan Stock Exchange, the Central Depository Company, and
the National Clearing Company.
PIA has struggled with significant debts and losses over the
years, necessitating substantial financial injections from the government to
sustain its operations. The airline faced further challenges after the
grounding of flights due to the COVID-19 pandemic in 2020, followed by a fatal
domestic flight crash in Karachi. This incident revealed safety concerns,
leading to flight bans by international regulators.
Prime Minister Shehbaz Sharif has reiterated his commitment to
privatizing the airline, emphasizing transparency in the process and warning
against bureaucratic delays. He has reassured the business community of
Pakistan regarding the transparent nature of the privatization process for the
national airline.
Source: Arab News