Financial Advisor unveils comprehensive business plan for PIA divestment

January 25, 2024 (MLN): Earnest & Young, the Financial Advisor for divestment of Pakistan International Airlines Corp (PSX: PIAA) presented a business plan on Thursday that outlines the investment roadmap and covers the capital and fleet needs of the national carrier.

According to a press release issued on the day, the advisor unveiled the plan during a meeting with the Caretaker Federal Minister for Privatisation, Fawad Hasan Fawad and further suggested immediate funding requirements for the airline.

The advisor highlighted that the proposed plan will not only benefit PIA in the short and medium term but will make it a viable and globally competitive airline.

The Federal Minister advised further rationalization of the projections before the submission of the plan for approval of the federal cabinet.

“The legal segregation plan, transaction structure, and business plan and valuation methodology shall be taken to the federal cabinet for final approval,” the press statement concludes.

It is crucial to note that the Financial Advisor on January 09, 2024, presented a proposal for the legal segregation of the PIAA aimed at the separation of core aviation business and assets for eventual divestment of core aviation services in the first instance.

As per the proposal, basic engineering services and international routes would be part of the core assets offered for sale to buyers. Whereas, the non-core assets will be retained in a Holdco structure for subsequent divestment in separate structures and transactions.

Apart from the ongoing divestment talks in the market, a positive development also emerged earlier this month for PIA as it successfully inducted one of its two A320 aircraft into its fleet, which was previously entangled in a payment dispute in Malaysia.

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