The federal government has prepared a framework for the division of assets and liabilities of the national flag carrier—the Pakistan International Airlines (PIA)— as part of its privatisation process.
According to official documents seen by The Express Tribune, the airline’s assets and liabilities have been divided between the PIA and a holding company.
The government has disclosed that the total value of the PIA’s assets is Rs171.43 billion. Once the privatisation process is completed, the PIA’s assets along with its liabilities will be divided between the holding company and the new company taking over the airline.
The documents show that out of the PIA’s assets worth Rs171.43 billion, assets worth Rs146.57 billion will be transferred to the new management of the PIA, while assets worth Rs24.86 billion will remain with the holding company.
Out of the national airline’s Rs830 billion deficit, Rs202 billion will be borne by the PIA and Rs628 billion by the holding company. As a result, the new company will begin the PIA operations with a deficit of Rs55.70 billion.
According to the documents, the government will divide the PIA operations into core and non-core segments as part of the privatisation process. All assets and liabilities of the PIA will be divided between these two segments.
Post-privatisation, assets including aircraft worth Rs92.62 billion, technical equipment for flight operations, operational offices, and other properties, along with long-term deposits worth Rs6 billion, trade debts and advance deposits worth Rs22.35 billion, and other receivables worth Rs16.83 billion, will be transferred to the new PIA management. Additionally, liabilities in the form of long-term financing worth Rs15.63 billion, aircraft leases worth Rs30 billion, employee salaries amounting to Rs27.26 billion, and trade and other payables totaling Rs121 billion will be inherited by the new company.
The documents further reveal that due to the PIA’s privatisation, a total of Rs628 billion in losses and liabilities have been transferred to the PIA holding company.
Long-term investments worth Rs4.53 billion in the PIA Investments, Skyroom Private Limited, Midway House Private Limited, and PTDC Duty-Free Shops Limited, as well as hotels including the Roosevelt, will be transferred to the PIA holding company.
Loans taken from domestic and international institutions and the interest payable on them, amounting to Rs444 billion, will also be transferred to the holding company.
According to the documents, the PIA owes Rs161 billion to the government and Rs267 billion to commercial banks, which will be transferred to the holding company.
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