Pakistan

Ernst & Young to Steer PIA Towards Privatisation

The Pakistan International Airlines Corporation (PIACL) is set to undergo a significant transformation as the Pakistani government has approved the UK’s Ernst & Young (EY) as the financial advisor for its privatisation. This move is aimed at preparing the financially struggling entity for sale.

In a meeting chaired by caretaker Minister for Privatisation Fawad Hasan Fawad, the Privatisation Commission Board granted approval to appoint EY for the divestment of PIACL. The decision came after eight parties submitted proposals to be the financial advisor. The Evaluation Committee, formed by the privatisation commission, declared the consortium led by EY as the “top-ranked” party based on criteria.

A negotiating committee has also been established by the commission to finalise the financial services agreement with EY. This follows the directive of caretaker Prime Minister Anwaar-ul-Haq Kakar to expedite the PIA privatisation process.

In a bid to address the airline’s pressing needs, the Economic Coordination Committee (ECC) recently approved a Rs8 billion bridge financing package for PIA. This package will draw from the resources of the Civil Aviation Authority (CAA) to settle overdue payments. The ECC, under the chairmanship of Finance Minister Dr Shamshad Akhtar, approved a bilateral arrangement between the CAA and PIA.

The board also granted a 24-month extension to financial services agreements to the House Building Finance Corporation Limited (HBFCL) and the First Women Bank Limited (FWBL) each. Additionally, the board discussed longstanding issues related to the 35-year pending privatisation of the Pak-China Fertiliser Limited (PCFL).

This move towards privatisation comes after Pakistan announced in August that it would privatise the airline as part of a fiscal discipline plan agreed under an International Monetary Fund (IMF) bailout. The airline has been in crisis for a long time, with its flights to Europe and the UK suspended since 2020 after the European Union’s Aviation Safety Agency revoked the national carrier’s authorisation to fly to the bloc following a scandal over pilot licences.

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