PIA employee liabilities cross Rs30bln ahead of complete privatisation deal

WEB DESK: The liabilities linked to Pakistan International Airlines (PIA) employees have crossed Rs30.34 billion ahead of the national carrier’s privatisation deal, according to official documents.

The documents revealed that PIA’s total assets stand at Rs191.53 billion, while its overall liabilities amount to Rs182.43 billion. The airline’s net assets and equity value have been estimated at Rs9.1 billion.

As part of the privatisation transaction, the government has offered 11 properties worth Rs14.26 billion, while retaining ownership of 33 strategically important properties, including the Roosevelt Hotel in New York and the Scribe Hotel in Paris.

The documents said that the government is expected to receive a minimum of Rs55 billion from the sale of its 100 per cent equity stake in PIA.

The privatisation process is aimed at reducing the financial burden on the government, including outstanding dues owed to institutions such as the Federal Board of Revenue (FBR) and the Airports Authority.

According to the documents, the government had limited capacity to provide further financial support to PIA due to IMF programme commitments and budgetary constraints.

Under the transaction, Rs80 billion in fresh equity has already been injected into PIA Corporation Limited, with management control transferred to the buyer consortium. The buyer will also be required to inject an additional Rs45 billion into the airline within 12 months.

The government expects that fleet upgrades and expansion of new routes following privatisation will help create employment opportunities and increase tax revenues.

The first closing date of the privatisation transaction was set for June 29, under which the government received Rs10 billion as payment against the sale, the documents added.