Approval of Bailout Package for PIA Expected at ECC Meeting

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Abbas Ali
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Approval of Bailout Package for PIA Expected at ECC Meeting

Post by Abbas Ali » Fri Oct 27, 2017 9:31 pm

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Economic Coordination Committee (ECC) of the Cabinet meeting to be chaired by Prime Minister Shahid Khaqan Abbasi is expected to take place on Monday (October 30).

Agenda of the meeting includes presentation of summary for approval of another bailout package for PIA.

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Re: Approval of Bailout Package for PIA Expected at ECC Meeting

Post by Abbas Ali » Sun Oct 29, 2017 1:17 pm

ECC likely to okay another bailout package for PIA

October 29, 2017

ISLAMABAD -
The Economic Coordination Committee (ECC) of the Cabinet is likely to approve another bailout package for Pakistan International Airlines (PIA) in its upcoming meeting that will be held next week.

The ECC meeting, to be chaired by Prime Minister Shahid Khaqan Abbasi, would consider the proposal of aviation division to give bailout package to the PIA to bring it out of an abysmal crisis. Bailout package for PIA , worth more than Rs10 billion, would enhance sovereign guarantees limit from Rs162 billion, as national flag carrier is in deep financial constraints.

Prime Minister’s Adviser on Aviation Sardar Mehtab Ahmed Khan had recently revealed that accumulated losses of PIA had reached Rs400 billion and the airlines suffered a loss of Rs 40 billion in 2016 alone. The PIA’s debts swelled to Rs186.5 billion and its accumulated losses amounted to Rs316 billion. He informed the media couple of weeks before that if the government is ready to pay mark-up on loans worth $2 billion, it would be instrumental in revival of the airline.

The loss-making PIA was on the active list of privatisation of the federal government under International Monetary Fund programme. However, the government failed to privatize the PIA due to the strong resistance from the opposition parties and labour union of the department.

Source: The Nation
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Re: Approval of Bailout Package for PIA Expected at ECC Meeting

Post by Abbas Ali » Sun Oct 29, 2017 1:35 pm

Summary for Government of Pakistan guarantees' approval to increase PIA bank loans limit from eleven to thirteen billion rupees will be presented in ECC meeting on Monday.

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Re: Approval of Bailout Package for PIA Expected at ECC Meeting

Post by Abbas Ali » Sun Oct 29, 2017 1:50 pm

According to a document shown on DAWN News channel, agenda of Economic Coordination Committee (ECC) of the Cabinet meeting to be chaired by Prime Minister Shahid Khaqan Abbasi on Monday (October 30) includes:

Government of Pakistan (GoP) Support Required by Pakistan International Airlines Corporation Limited (PIACL).

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Re: Approval of Bailout Package for PIA Expected at ECC Meeting

Post by pk363 » Mon Oct 30, 2017 10:17 am

Incompetent and corrupt organization given another 13billon

https://www.dawn.com/news/1367216/sick- ... ut-package

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Re: Approval of Bailout Package for PIA Expected at ECC Meeting

Post by Abbas Ali » Wed Nov 01, 2017 10:23 pm

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Economic Coordination Committee (ECC) of the Cabinet meeting chaired today by Prime Minister Shahid Khaqan Abbasi approved Government of Pakistan guarantees limit increase by 13.58 billion rupees for bank loans to be taken by Pakistan International Airlines Corporation Limited (PIACL). PIA bank loans limit has been increased from 161.5 billion rupees to 175 billion rupees.

Briefing was given on PIA Business Plan for making it a profitable airline. Formation of a committee to review PIA Business Plan has been advised by PM Abbasi

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Re: Approval of Bailout Package for PIA Expected at ECC Meeting

Post by Abbas Ali » Thu Nov 02, 2017 10:55 am

ECC approves Rs13.6bn bailout for national flag carrier PIA

Khaleeq Kiani

November 02, 2017

ISLAMABAD:
The government approved on Wednesday another Rs13.6 billion bailout package for Pakistan International Airlines (PIA).

The decision was taken at a meeting of the Economic Coordination Committee (ECC) of the cabinet presided over by Prime Minister Shahid Khaqan Abbasi.

“The ECC approved a proposal to increase the commercial borrowing guarantee limit of PIA by Rs13.58bn,” said an official announcement after the meeting.

PIA is a chronic recipient of bailout packages in the form of capital injections through the budget or commercial loans from banks against sovereign guarantees because of its continuous losses. Its current liabilities are estimated on the higher side of Rs300bn. Most of these liabilities have contingent ramifications on the federal budget.

The fresh bailout package was required to roll over its existing maturing loans and liabilities. It has been in continuous default on payments to fuel suppliers, including state-run Pakistan State Oil (PSO).

Early this year, the government increased the guarantee limit for PIA by Rs10.5bn to Rs161.5bn to address its immediate challenges. The guarantee limit was further enhanced to about Rs175bn.

Source: DAWN
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Re: Approval of Bailout Package for PIA Expected at ECC Meeting

Post by Abbas Ali » Thu Nov 02, 2017 1:31 pm

The Aviation Division had requested a Rs16 billion facility but the Ministry of Finance cut it down to Rs13.6 billion. Of the amount, Rs5.3 billion will be borrowed to pay interest on previous loans, Rs2 billion has been given for undertaking an engineering project, Rs1 billion for ground support equipment and Rs5.4 billion for construction of PIA hangers at New Islamabad International Airport.

Source: https://tribune.com.pk/story/1547498/2- ... -approved/
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Re: Approval of Bailout Package for PIA Expected at ECC Meeting

Post by Abdullah » Sun Nov 05, 2017 4:42 pm

PM Abbasi rejects 40-page turnaround plan for PIA.

Published in Dawn, November 2nd, 2017

ISLAMABAD: The federal cabinet on Wednesday trashed a ‘turnaround plan’ for Pakistan International Airlines Corporation (PI­AC).

The cabinet meeting chaired by Prime Minister Shahid Khaqan Abbasi held a detailed discussion on how the national flag carrier can stand on its own feet.

An insider who attended the meeting told Dawn that senior officials of the PIAC, who had been tasked by the prime minister to prepare a comprehensive turnaround plan for the crippling national flag carrier, came up in the meeting with a 40-page plan that took three months for completion.

However, the prime minister and his cabinet rejected the plan and gave a tough time to the PIAC team by raising objections on the plan. “I do not want 40-page plan, give a brief plan on four to five pages as to how we can rescue the national flag carrier,” the prime minister, who himself have an experience to run a airline, said.

The prime minister refused to grant any financial package to the PIAC in future unless its management comes up with a clear and effective plan.

“I will not give even a single penny if you people do not tell me how much amount to be required on the first, second, third and fourth year and what progress is expected year wise,” he added.

Later, the meeting decided to form a special committee to fine-tune the turnaround plan prepared by the PIAC management.

Source: Dawn.com

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Re: Approval of Bailout Package for PIA Expected at ECC Meeting

Post by Abbas Ali » Fri Nov 24, 2017 11:22 am

MUSHTAQ GHUMMAN

NOV 24TH, 2017

ISLAMABAD


Aviation Division revealed that PIACL was going through a difficult period due to continuous losses and severe cash flow crises, hampering operations. Various suppliers have stopped supplies to PIA due to non-payments and lessors are giving default notices. The situation needs immediate redressal otherwise it could result in disruption of operations and services. PIACL has submitted its funds requirements for the period July - December 2017 as follows: (i) GoP guaranteed loan installments, Rs 17.017 billion; (ii) non-GoP guaranteed loan installments, Rs 7.132 billion; and (iii) mark up payments, Rs 6.113 billion. The grand total is Rs 30.262 billion

Aviation Division further stated that PIACL would endeavor to pay the Non-GoP guaranteed principal installments totaling PKR 7.132 billion from its own resources. The GoP guaranteed principal installments totaling PKR 17.017 billion would be settled through roll-over of guarantees with the assistance of Ministry of Finance. However PIACL would need support for the mark-up payments totaling PKR 6.113 billion.

The status of GoP guarantee limit assigned by ECC to PIACL as on 30th April, 2017 is as follows: (i) guaranteed limit assigned by ECC, Rs 161.50 billion; and (ii) GoP guarantees outstanding, Rs 161.50 billion. Aviation Division apprised that during a recent meeting with Prime Minister, PIACL requested support of the Government towards following Capital expenditure: (i) engineering projects, Rs 2.00 billion; and (ii) ground support, Rs 1.00 billion.

Furthermore, PIACL needs to construct certain operational facilities at New Islamabad International Airport (NIIAP) project site for which space has been allocated by CAA. These facilities include construction of a Flight Kitchen, Wide Body Aircraft maintenance/repair Hangar and Technical Ground Support equipment area/handling offices which besides saving costs would also generate additional revenue, especially in the backdrop of CPEC market growth/demand was anticipated. The total estimated cost of the civil, electrical and layout etc of the PIACL facilities is about PKR 6.90 billion.

Finance Division has examined the proposal and agreed to provide GoP guarantee up to a rationalized limit of Rs 13.585 billion as per following breakup, subject to the approval of ECC:- (i) mark up payments (GoP Guarantee Loans), Rs 5.238 billion;(ii) engineering project, Rs 2.0 billion;(iii) ground support equipment, Rs 1.0 billion;(iv) construction at NIIAP project site (2017-18) , Rs 5.347 billion, totaling Rs Rs 13.585 billion.

Finance Division has further recommended that PIACL may formulate a comprehensive debt retirement plan on long term basis, rather than seeking more loans to pay off the existing ones, since continuous borrowing is not only unsustainable but may even affect PIA as a going concern. The meeting was informed that PIACL has formulated a comprehensive business plan to be presented to the Federal Cabinet. The debt retirement plan is an essential component of the business plan to revive PIACL on a sustainable basis.

Source: brecorder.com
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