Pakistan to provide Rs5.98 billion support to PIA to address financial obligations
Pakistan on Monday approved Rs5.985 billion
($21.5 million) in funding for its national carrier, Pakistan
International Airlines, to address key financial obligations, as the
government signaled early signs of easing inflationary pressures.
The decision was taken by the Economic Coordination Committee, a top cabinet
body overseeing economic policy, during a meeting reviewing funding
requirements linked to the airline’s ongoing restructuring.
According to a statement issued by the finance
ministry, the approved funds will be used to reimburse medical and pension
payments and to cover pending salary disbursements. The financial support is
being routed through the airline’s holding company, which was created to manage
restructured liabilities as part of a broader privatization effort.
Read More ECC
approves financial support for PIA’s Roosevelt Hotel in New York
Privatization Efforts Underway
Pakistan is currently working to privatize PIA
under a $7 billion program with the International
Monetary Fund, which includes commitments to reform loss-making
state-owned enterprises. As part of this plan, the government aims to sell a 75
percent stake in the airline after transferring a significant portion of its
debt to a separate entity to improve investor appeal.
In a major development, a consortium led by
investment firm Arif Habib Corporation has
agreed to acquire a 75 percent stake in PIA for Rs135 billion (approximately
$482 million). The group includes prominent industrial players such as Fatima Fertilizer, Fauji Fertilizer Company, AKD Group, and Lake
City Holdings.
The transaction, one of the largest
privatization deals in Pakistan in recent decades, remains subject to
regulatory approvals and the fulfillment of operational conditions before
management control is transferred.
Longstanding Financial Challenges
PIA has long weighed heavily on public
finances due to mounting liabilities, governance concerns, and operational
inefficiencies. Previous privatization attempts have stalled amid investor
concerns over debt and structural challenges.
Read More Troubled
national carrier PIA gets another Rs4 billion from government
The creation of a holding company to absorb
legacy liabilities is seen as a key step in reviving investor confidence and
enabling a cleaner balance sheet for prospective buyers.
Source: Arab
News