LAHORE: A major progress has been achieved in relation to privatisation of Pakistan International Airlines (PIA), following headway in its restructuring process.
The national flag-carrier inches closer to sell off following major headway in its restructuring has been made. According to Ministry of Privatisation, two significant milestones have been achieved in the restructuring of the Pakistan International Airlines Corporation Limited (PIACL) in the preceding week. On 20th and 21st of April, 2024, the shareholders and creditors of PIACL approved the scheme of arrangement, filed with the Securities & Exchange Commission of Pakistan (SECP), as per announcement, made by the ministry on Monday.
As part of the privatisation process, the federal cabinet approved legal segregation and restructuring of the PIACL, following which a scheme of arrangement (SoA) was filed in the SECP on March 28, 2024. To meet regulatory requirement of the SECP to restructure the PIACL, the SoA was required to be approved by the shareholders and creditors of the PIACL.
In this connection, the blue print of the restructuring was presented to the shareholders of the PIACL during the extraordinary general meeting, held on Aril 20, 2024, which was overwhelmingly approved by the shareholders with majority of 99.97 per cent votes in favour of proposal.
Likewise, in a meeting of the PIACL creditors, held on Aril 21, 2024, the restructuring plan and SoA was endorsed by the creditors. Thus, satisfying two major requirements for processing of the SoA by the SECP.
As per the Ministry of Privatisation, the restructuring will deliver a significantly debt-lite PIA, with better cash flows, focused on aviation and providing foundation for future growth to potential investors, while ensuring value creation for shareholders.
It may be noted that the PIA has emerged as the foremost priority for privatisation due to its persistent and staggering financial losses, amounting to billions of rupees annually. Hence, the present government initiated process of floating the PIA for its sell off. Subsequently, the Privatisation Commission formally called for expressions of interest (EoI) to acquire 51-100pc of the share capital and management control of the PIA early this month.
After transferring “non-core” assets and liabilities to a newly established holding company, the government is in a position to sell national flag-carrier. Included in the acquisition are core assets including aircraft and liabilities, staff employed in the core airline operation as well as allied operations such as ground handling, training, engineering, and catering, and rights and obligations under various operational agreements, executed by the PIACL, including air services agreements, code sharing agreements, fuel supply agreements, passenger sales agency agreements, and foreign loan agreements, according to a report.
“Pursuant to the scheme of arrangement, the existing shareholders of the PIACL will become shareholders of the PIA HoldCo (the newly established holding company), in the same proportion they currently hold in the PIACL, and the PIACL will become a wholly-owned subsidiary of the PIA HoldCo, with a single class of ordinary shares,” the EoI invitation said.
Khyber Pakhtunkhwa Chief Minister Ali Amin Gandapur. —Radio PakistanISLAMABAD. All the witnesses have been...
Former prime minister, MNA Raja Pervez Ashraf speaking on the occasion of World Press Freedom Day at the National...
Poster of “7th Sky Entertainment” drama serial “Khumar”. — YouTube/Geo News KARACHI: The last episode of...
Mahr Sahibzad Khan. — PMD websiteISLAMABAD: Prime Minister Shehbaz Sharif approved the summary for re-employment of...
Pashtunkhwa Mili Awami Party Chairman Mahmood Khan Achakzai is participating in a protest in Pishin against alleged...
In this screengrab, Agriculture Minister Ashiq Hussain Kirmani chairs a meeting, Punjab Agriculture Secretary Iftikhar...