PIA privatisation expedited; framework for asset and liability division prepared

ISLAMABAD: The federal government has outlined a framework to manage the division of assets and liabilities for Pakistan International Airlines (PIA) as part of its privatisation efforts.

According to a news report by Express Tribune, documents show that PIA’s assets and liabilities will be split between the airline itself and a holding company. The government has reported that PIA’s total asset value stands at Rs 171.43 billion.

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Post-privatisation, these assets, along with associated liabilities, will be allocated between the holding company and the new entity assuming control of the airline.

The documents detail that out of PIA’s Rs 171.43 billion in assets, Rs 146.57 billion will be transferred to the new management, while Rs 24.86 billion will remain with the holding company.

Regarding PIA’s Rs 830 billion deficit, Rs 202 billion will be handled by PIA and Rs 628 billion by the holding company. Consequently, the new company will commence PIA operations with a Rs 55.70 billion deficit.

The government plans to separate PIA operations into core and non-core segments for privatisation purposes. All assets and liabilities will be divided accordingly.

Post-privatisation, assets such as aircraft valued at Rs 92.62 billion, technical equipment, operational offices, long-term deposits of Rs 6 billion, trade debts, advance deposits worth Rs 22.35 billion, and other receivables of Rs 16.83 billion will be assigned to the new PIA management.

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The new company will also inherit liabilities, including Rs 15.63 billion in long-term financing, Rs 30 billion in aircraft leases, Rs 27.26 billion in employee salaries, and Rs 121 billion in trade and other payables.

The documents further indicate that Rs 628 billion in losses and liabilities will be transferred to the holding company as well.