Pakistan plans to privatise loss-making PIA airline

The Cabinet Committee on Privatisation in Pakistan has approved a plan to speed up the sale of Pakistan International Airlines Corporation (PIACL). This includes selling 51-100% of its shares and management control. The meeting was chaired by Deputy Prime Minister Ishaq Dar, who emphasized the government's commitment to privatizing the airline to reduce financial pressure on the country. The government plans to issue an Expression of Interest (EoI) this month. This move is part of a renewed effort to privatize the national airline. To attract buyers, the government is offering a clean balance sheet and will exempt them from an 18% GST on aircraft purchases. Previously, potential buyers withdrew interest due to concerns over the airline's negative equity, which stands at Rs45 billion. The government is working to address this, absorbing the negative equity from various taxes and liabilities. The sale of the airline is essential for clearing this debt. Financial advisory for the transaction has been handed over to Ernst & Young. Some payments have already been made for their service, but further payments will depend on the completion of the sale. The government has also separated non-core assets to streamline the bidding process. Currently, PIACL's total assets are valued at Rs155 billion, while its liabilities are Rs200 billion. The new owner will need to add 15 to 20 new aircraft to the airline's fleet once the sale is completed.