Government Speeds Up PIA Privatisation
ISLAMABAD: The federal government has created a plan to divide the assets and debts of Pakistan International Airlines (PIA) as part of its privatisation efforts.
Official documents reveal that PIA’s assets and debts will be split between PIA and a new holding company. The total value of PIA’s assets is Rs171.43 billion. After privatisation, these assets and debts will be divided between the holding company and the new company taking over PIA.
From the total assets of Rs171.43 billion, Rs146.57 billion will go to the new PIA management, while Rs24.86 billion will stay with the holding company. Out of PIA’s Rs830 billion debt, Rs202 billion will be taken on by PIA and Rs628 billion by the holding company. This means the new company will start with a debt of Rs55.70 billion.
The government will separate PIA’s operations into core and non-core segments. Assets and debts will be split between these segments. The new PIA management will receive assets like aircraft worth Rs92.62 billion, flight operation equipment, offices, other properties, long-term deposits worth Rs6 billion, trade debts and advance deposits worth Rs22.35 billion, and other receivables worth Rs16.83 billion. The new company will also take on liabilities including long-term financing worth Rs15.63 billion, aircraft leases worth Rs30 billion, employee salaries amounting to Rs27.26 billion, and trade and other payables totaling Rs121 billion.
The holding company will take on Rs628 billion in losses and liabilities. Long-term investments worth Rs4.53 billion in PIA Investments, Skyroom Private Limited, Midway House Private Limited, PTDC Duty-Free Shops Limited, and hotels like the Roosevelt will be transferred to the holding company. Loans from domestic and international sources, amounting to Rs444 billion, will also be transferred to the holding company. PIA owes Rs161 billion to the government and Rs267 billion to commercial banks, which will be moved to the holding company.
