February 01, 2024 (MLN): In a significant development, the Minister for Privatization, also serving as the Chairman of the Privatisation Commission, conducted a crucial meeting with bank officials on Wednesday on Pakistan International Airlines Corporation Limited (PIAA)’s debt re-profiling.
The outcome of the meeting was notably positive and the matter has been moved to the Cabinet for further approvals, hinting at potential progress in addressing the company's debt burdens, according to the sources.
PIA, the national carrier of Pakistan, has been grappling with financial constraints for many years, partly due to swelling debts.
The meeting led by the Minister underlined the government's commitment to finding feasible solutions to revitalize the airline's financial health.
The discussions aimed to explore deliberate avenues for restructuring PIACL's debt obligations, potentially paving the way for a more sustainable financial framework.
The positive outcome of the meeting will instil optimism among stakeholders, indicating a potential turning point in PIACL's financial trajectory.
At present, PIA owes Rs281 billion to commercial banks and faces an interest rate of 23.5% on these loans.
However, lately, Commercial banks proposed a fixed annual interest rate of 16.6% for deferring the recoveries of their Rs281bn loans to the national carrier over five years but the Finance Minister Dr Shamshad Akhtar, who has countered with a proposal of approximately 10% interest based on the banks’ actual cost of borrowing, rejected their proposal.
News reports indicated that banks’ reluctance to issue no-objection certificates for transferring their debt to a new holding company remained a major hindrance.
