The Pakistan International Airlines (PIA) Board of Directors (BoD) has given the green light to the company’s privatization and restructuring plan. The announcement was made in a notification to the Pakistan Stock Exchange (PSX) on Tuesday.
In its 83rd meeting held on March 25, 2024, the Board of Directors approved the Scheme of Arrangement (SOA) aimed at restructuring and privatizing Pakistan International Airlines Corporation Limited, along with associated modalities. This scheme is set to be submitted to the Securities and Exchange Commission of Pakistan (SECP), as stated in the notification to the bourse.
On Tuesday, the company’s share price surged to its upper limit, settling at Rs25.39. However, this increase had begun before the public release of the notification, around 11 am.
Last month, the cabinet had approved the privatization plan for PIA. The restructuring, facilitated by transaction advisor Ernst & Young, has led to the division of PIA into two entities: one ‘clean’ entity and another to be placed under a holding company burdened with legacy debts amounting to Rs825 billion ($2.95 billion), consisting of loans, creditors’ funds, and losses. The ‘clean’ entity is the one slated for sale.
These measures are intended to attract investors to PIA, as stated by the Prime Minister’s Office in a previous statement.
