The The antitrust watchdog Competition Commission of Pakistan (CCP) has given the green light to the Scheme of Arrangement (SoA) for the privatisation process of the Pakistan International Airlines Corporation Limited (PIACL).
The CCP on Saturday announced the approval of the Scheme of Arrangements for the acquisition of 100% shareholding in Pakistan International Airlines Corporation Limited (PIACL) by a new company named PIA Holding Company Limited (Holdco).
In its release, the Competition Commission of Pakistan (CCP) states that the acquisition of PIA Corporation by PIA Holding Company would not generate any material impact on the market. It described the nature of the holding company’s business as real estate, which would own PIA’s liabilities, specific business property, rights and obligations both inside and outside of Pakistan.
The CCP announced the decision two days after the Privatisation Commission (PC) board extended the date for submission of Expressions of Interest (EOI) by investors by 15 days.
The commission was compelled to extend the date after a majority out of the 10 parties that bought bidding documents did not submit them, rather asked more time for the same. No foreign airline has shown interest in PIA’s privatisation so far, although three domestic private airlines have participated in the process.
The Pakistani federal government approved the transaction based on the ‘Divestment of PIACL - Legal Segregation Plan and Transaction Structure’ submitted by the Privatisation Division on February 6, 2024.
The south asian carrier, which operates a mixed fleet of around 30 aircraft including Boeing 777s , Airbus 320s and ATR42s, has been going through a financial crisis to maintain the fleet due difficulties in procuring spare parts, that has resulted in the grounding of multiple aircraft.
As per sources, the rampant appreciation of the US dollar against pakistani rupee (PKR) and rising petroleum prices have made the situation worst for the PIA as it has been unable to buy spare parts for three years due to lack of funds.
Now, the current Government has determined to offload the national carrier from its payroll , and as per the approved Scheme, Holdco will acquire 100% shareholding of PIA, and Non-Core Assets and Non-Core liabilities of PIA will also be transferred to Holdco.
Holdco, a public limited company wholly owned by the government of Pakistan, was recently incorporated to take over specified assets, liabilities and subsidiaries of PIA, including its business, property, rights and obligations both domestically and internationally.
The Competition Commission of Pakistan said that its approval of the merger demonstrated the commitment to furthering the government of Pakistan’s economic revival plan, particularly in attracting investment through the Special Investment Facilitation Council (SIFC).
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