The Securities and Exchange Commission of Pakistan (SECP) has authorized the legal segregation of Pakistan International Airlines (PIA), marking a significant milestone in one of the most intricate restructuring endeavors to date.
The restructuring plan for the transfer of PIA’s non-core assets and liabilities to PIA Holding Company Limited was authorized on May 3, according to a press statement released by the Ministry of Privatization on Sunday.
The press statement stated that the plan has been communicated to the Central Depository Company (CDC), National Clearing Company Limited (NCCL), Ministries of Finance and Privatization, and Pakistan Stock Exchange (PSX).
In the joint efforts of the Privatization Commission, Finance Division, Aviation Ministry, and PIA to reorganize the national carrier, this directive represents a critical turning point.
According to the press statement, the plan went into effect on April 30, 2024. It also stated that the PSX, CDC, and NCCL have been instructed by the SECP to make sure that PIA Holding Company Limited is listed smoothly in accordance with all applicable laws and regulations.
In June 2023, Pakistan, which was experiencing a severe economic crisis, consented to restructure financially failing state-owned companies in exchange for a $3 billion bailout from the International Monetary Fund (IMF).
Only a few weeks after signing the IMF deal, the government opted to privatize PIA.
The departing parliament gave the caretaker administration, which assumed office in August to supervise the election on February 8, the authority to take whatever necessary actions to fulfill the fiscal goals set forth in the agreement with the IMF.
As of June of last year, PIA had liabilities of 785 billion Pakistani rupees ($2.81 billion) and cumulative losses of 713 billion rupees. According to its CEO, the company will probably have lost 112 billion rupees in 2023.
