ISLAMABAD: Government will finalize relevant modalities for the privatization of the Pakistan International Airlines Corporation (PIAC) in consultation with PIA management and all the stakeholders involved.
These modalities are related to the transaction, including restructuring and divestment strategy, transaction structure, divestment mode and others.
The Government of Pakistan is the principal stakeholder holding 85% share capital while 8% is held by BESOS PIA Employees Empowerment Trust.
Well placed source at Ministry of Finance told this scribe that in pursuant to the decision of the Cabinet Committee on Privatization (CCOP) and Privatization Commission Board, the Privatization Commission had appointed consortium led by Dubai Islamic Bank, International Air Transport Association (IATA) Consulting, Deloitte, Freshfields, HMBNR, etc hired Financial Advisor for PIA transaction.
However, the source said that relevant modalities of the transaction, including restructuring and divestment strategy, transaction structure, divestment mode etc will be finalized in consultation with the PIA management and all the stakeholders involved.
“For the year, ended on December 31, 2013, PIAC booked net revenue of Rs 96 billion (FY-2011-12—112 billion” the source added that the higher aircraft fuel cost of Rs 55 billion (FY-2011-12—Rs 61 billion) due to aging fleet of coupled with other operating cost of Rs 71 billion ( FY-2011-12—Rs 68 billion) besides finance cost of Rs 12.6 billion FY 2011-12—Rs 11.4 billion) led the company book the loss before tax of Rs 43 billion (FY-2011-12—Rs 29 billion) for the period.
Moreover, the source revealed that the accumulated losses as on December 31, 2013 stood as Rs 198 billion (December 31, 2012—Rs 152 billion), whereas out of the gross finance and lease liabilities of Rs 163 billion and Rs 100 billion, were of the short term maturity cast serious doubts over the company going concerns status without the assistance of federal government.
It is pertinent to mention here that in PIAC, the national flag carrier was incorporated in 1955 and presently operated under the Pakistan International Airlines Corporation Act 1956. PIAC is listed on all the three domestic stock exchanges. GOP intends to restructure its national flag carrier through private sector partnership in ore operation of PIAC and to enable the airlines to rebuild on it improved operating performance. Primary objective with regard to PIAC is to ensure the continued operation of PIAC as the country’s National Airline.
