PIA employee liabilities cross Rs30 billion ahead of privatisation deal

ISLAMABAD: The liabilities associated with Pakistan International Airlines (PIA) employees have crossed Rs30.34 billion ahead of the national carrier’s privatisation transaction, according to official documents.

The documents revealed that PIA’s total assets are valued at Rs191.53 billion, while the airline’s overall liabilities stand at Rs182.43 billion. The net assets and equity value of the national carrier have been estimated at Rs9.1 billion.

As part of the privatisation process, 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.

According to the documents, the government is expected to receive a minimum of Rs55 billion through the sale of its 100 per cent equity stake in PIA.

The privatisation initiative aims to reduce the financial burden on the national exchequer by addressing outstanding liabilities, including dues owed to institutions such as the Federal Board of Revenue (FBR) and the Airports Authority.

The documents stated that the government’s ability to provide further financial support to PIA remained limited due to commitments under the International Monetary Fund (IMF) programme and prevailing budgetary constraints.

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

Officials said the privatisation process is expected to pave the way for fleet modernisation, expansion of international routes, creation of employment opportunities and an increase in government revenues through improved tax collection.

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