This innovative Islamic transaction is secured by PIA’s ticket sales generated in the Kingdom of Saudi Arabia and accumulated through international air transport association’s billing and settlement plan.
The NBP, which was given a triple A rating on the A-One plus by the JCR-VIS credit rating company, is one of the largest banks of Pakistan. The bank is well equipped with capital and reserves of Rs145.850 billion and a capital adequacy ratio of over 15%. For this transaction Citibank, NBP and Warba Bank acted as mandated lead arrangers, while Bank Al Falah Limited, United Bank Limited and Alubaf Arab International Bank were the additional participants of the transaction agreement. Citibank has been chosen as the acting security trustee and the account bank for this programme.
This innovative Islamic transaction is secured by PIA’s ticket sales generated in the Kingdom of Saudi Arabia and accumulated through international air transport association’s billing and settlement plan. The three- year facility will be used to increase the confidence of investors in the airline and its strategic importance to the country.
PIA Managing Director Muhammad Junaid Yunus was looking forward to enhancing the airline’s fleet capacity. “We’re working towards it by adding narrow body aircraft,” said Yunus. The airline is further restructuring other operational programmes to improve services.
Nadeem Lodhi, Citibank’s country officer, was delighted at the development. “It’s pleasing that PIA has successfully joined the second commercially syndicated foreign currency financing programme within two years,” said Lodhi.
The transaction agreement is important for the aviation sector as it broadens the airline’s corporate credit to regional Islamic financiers despite challenging market conditions.
Published in The Express Tribune, November 21st, 2013.
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1731570357-0/elon-musk-(1)1731570357-0-270x192.webp "republicans accused of protecting elon musk")
Is this just window-dressing another government bailout?!?!?!
(sukuk through NBP rather than direct payment?!)
How does this make sense ? Borrowing from the government ( NBP ) without any demonstrable ability to pay back..........the only answer for PIA is to close it down or sell it.