Government, Lender Banks Conclude PIA’s Commercial Debt Negotiations

The commercial debt negotiations of Pakistan International Airlines Corporation Limited (PIACL) have been successfully concluded among the government, domestic lender banks and Development Finance Institutions (DFIs) as part of the entity’s restructuring for privatization.

ISLAMABAD, (UrduPoint / Pakistan Point News – 29th Mar, 2024) The commercial debt negotiations of Pakistan International Airlines Corporation Limited (PIACL) have been successfully concluded among the government, domestic lender banks and Development Finance Institutions (DFIs) as part of the entity’s restructuring. for privatization.

A statement issued by the PIACL on Friday said the step paved the way for filing of the Scheme of Arrangement (SOA) for legal segregation of PIACL with the Securities and Exchange Commission of Pakistan on Thursday. The federal cabinet had approved the legal segregation plan of PIACL on February 6, 2024.

PIACL’s privatization has been a priority agenda for the federal government, and the above developments represent one of the most complex restructuring exercises undertaken to prepare PIACL for privatisation. This arrangement will help make a viable business case for private sector investment in the national carrier.

The domestic banks and financial institutions demonstrated firm commitment to the government’s privatization initiative and extended their full co-operation in finalizing the arrangement for PIACL’s commercial domestic debt.

Under the arrangement, PIACL’s commercial domestic debt will be moved to PIA Holding Company Ltd., established by the federal government as part of PIACL’s legal restructuring. The term sheet covering mutually agreed commercial aspects of loan transfer was signed yesterday between PIACL, PIA Holding Company and lender banks.

In order to manage the affairs of PIA Holding Company diligently, a seven-member independent board comprising of ex-State Bank Governor with prominent leaders from banking and other areas of expertise was notified this week by the Federal Government. The new board in its inaugural board meeting, held at Islamabad, endorsed the Scheme of Arrangement delineating the pathway for the privatization of Pakistan International Airlines. Following the approval of draft SOA by PIACL and PIA Holding Company boards, the Scheme of Arrangement (SOA) for PIACL restructuring was filed with Securities and Exchange Commission of Pakistan (SECP) yesterday.

Following these significant milestone developments, Expression of Interest (EOI) from potential investors for privatization of PIACL have been planned to be called in coming days.