ISLAMABAD: As part of reforms urged by the International Monetary Fund (IMF), the Privatisation Commission said that it was putting on the block a stake ranging from 51 per cent to 100pc of Pakistan International Airlines (PIA).
The disposal of the flag carrier is a step past elected governments have steered away from as likely to be highly unpopular, but progress on the privatisation will help pursue further funding talks with the IMF.
In a newspaper advertisement, the panel set a deadline of May 3 to receive statements of interest in PIA, which has piled up arrears of hundreds of billions of rupees, and it appointed EY Consulting as the financial adviser for the deal.
The newspaper advertisment by the Privatisation Commission.“The restructured PIA is being offered to potential investors in its ‘debt-lite’ new structure for a 51pc-plus stake,” the Privatisation Commission said in a website presentation.
The panel aimed to sign a share price deal by June 24, after completing all steps in the transaction, it added. “The restructured PIA provides an opportunity to invest in a a full-service airline.”PIA’s 23pc share of Pakistan’s aviation market is the biggest, and the airline could grow further to exceed historic levels of 30pc, the panel said.
With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s and 5 ATRs, the airline loses traffic to Middle Eastern carriers, who have a market share of 60pc, because of an absence of direct flights to destinations.
The carrier has air service pacts with 87 countries, and landing slots at key destinations such as London Heathrow.The re-organisation of the business will separate the aviation-related aspects from non-core components, so freeing the operating subsidiary of a large portion of legacy debt.
The restructuring will move out 603 billion rupees ($2.2 billion) of liabilities, leaving 203 billion ($730 million) on the balance sheet for the acquired business.
The presentation added that PIA broke even at earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs (EBITDAR) level in 2023, which the panel projected to continue in 2024.
