PIA Revival Plan - 'PIA Two' to be Formed on Temporary Basis

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http://www.thenews.com.pk/print/107310- ... ew-airline

[Abbas Ali]

Today, Finance Minister Ishaq Dar informed a parliamentary committee that making PIA a corporate is part of restructuring agenda for the airline and a strategic investor is sought for the airline. The strategic investor will get twenty-six percent shares of the airline. PIA administration will remain under government's control. Employees will not be laid off in this restructuring process and there's no plan to fully privatise the airline. Value of PIA assets is one-hundred & fifty billion rupees. Hotels owned by PIA will not be sold.

In nine months, PIA suffered loss of seven billion seven hundred fifty million rupees and the airline is seeking financial assistance of twenty-two billion rupees for up to June 2016.

PIA core business including routes and aircraft operations will be offered to strategic investor, he said.

Abbas

[Abbas Ali]

Government and opposition parties are nearing consensus on PIA bill after finance minister said that PIA administration will not be handed over to strategic investor.

http://www.dawn.com/news/1248793
http://pakobserver.net/2016/03/30/pias- ... c-partner/

I think it will be hard for the government to find a good strategic investor not interested in getting management control of the airline.

Abbas

[CoyBoy]

Whats the problem if an investor runs the professionally, that even PTI is oppposed to it shows mentality of even the likes of Imran Khan. I think only some obscure Chinese firm will invest on these terms.

[uzairali]

even if invester buy 26% share, the gov't can buy it back!

How is it selling the airline to some other country? Many countries have their state airlines operated by other countries or have some percentage owned by another company.

In fact, etihad owns 49% share in Alitalia, flag airline for state of italy! Some planes in its fleet will also come from etihad!

[Abbas Ali]

According to news sources, finance minister has said that government and opposition parties have reached consensus on PIA bill.

The bill will get passed in joint session of the parliament on April 11.

Abbas

[CoyBoy]

There are rumors of Air India now mulling sale of 49% stake, although they are denying it, even last time in 1999-2000 they had done same when PIA announced plans to privatise, ofcourse in their case they attracted Singapore Airlines and another big carrier as a buyer while PK got nobody.

Looks like Pakistan inspires them at times to do things, if I'm correct even opening doors to capitalism in the 1990s was thanks to Pakistan, when Nawz govt. of the time started advestising on CNN to draw investement here.

[Abbas Ali]

According to news sources, a parliamentary comprising members from government and opposition parties has approved PIA bill. The committee members have agreed to points including:

* PIA will remain under administrative control of the Government of Pakistan.
* PIA head office will remain in Karachi.
* Not more than 49 percent of shares to be offered to investor(s)/strategic investor.
* Share holders/investors not to get PIA management.
* PIA Board of Directors will be formed according to the percentage of share holders.
* Formation of a Board of Governors proposed to look after PIA.

PIA bill is due to be presented for approval in the joint session of the parliament on April 11.

Abbas

[Abbas Ali]

PIA bill with amendments proposed by opposition parties to be presented for approval in joint session of the parliament tomorrow (April 11), according to news sources.

The session will start at 11:00 AM.

Abbas

[Abbas Ali]

As demanded by opposition parties as a condition to support PIA bill in joint session of the parliament, government has withdrawn show cause notices, suspensions and job termination letters issued to PIA employees who took part in illegal strike against airline's privatisation process.

Parliamentary report on PIA bill has been presented in joint session of the parliament today. The government is making efforts to get the bill passed today.

Abbas

[Abbas Ali]

PIA bill unanimously approved by joint session of the parliament today.

The bill will convert PIA into a public limited company.

The government could have easily got the bill passed in joint session through its majority but opted to get the bill passed unanimously with the consensus of opposition parties, according to news sources.

Abbas

[Abbas Ali]

Delegation of Qatar Investment Authority met with finance minister Ishaq Dar today.

Probably PIA and/or Pakistan Airways also came under discussion?

Abbas

[Abbas Ali]

IMF ‘encouraged’ by PIA reform step, awaits more plans

April 14, 2016

ISLAMABAD - The International Monetary Fund is encouraged that Pakistan will convert its cash-strapped national airline into a limited company but said on Wednesday it will see if the reforms go far enough in restructuring the company.

Parliament adopted a law on Monday to convert Pakistan International Airlines (PIA) into a limited company but it prevents the government from giving up its management control.

Prime Minister Nawaz Sharif had made the privatisation of the company a top goal when he came to power in 2013.

The privatisation of it and 67 other state-owned companies is also a major element of a $6.7 billion IMF package that helped Pakistan stave off default in 2013. The IMF has continued to release loan instalments despite missed targets.

“We are encouraged that a consensus has been reached on corporatization of PIA,” Harald Finger, IMF mission chief for Pakistan, told Reuters in an email.

“We will need to study the approved bill and discuss with the authorities their emerging plans to run PIA strictly as a commercial entity and strengthen its performance in the absence of a transfer of management control to a private investor.”

PIA has accumulated losses of more than $3 billion. It and other loss-making companies, including power distribution companies and steel giant Pakistan Steel Mills, cost the government an estimated $5 billion a year.

In February, the IMF released the last $497 million tranche of its loan, even after Pakistan shelved plans to privatise its power supply companies and said it would miss deadlines to sell other loss-making state firms. Another $1.1 billion remains to be released.

Source: The Nation

[CoyBoy]

I think there will be management contriol by investor from behind the scene.

[Abbas Ali]

According to news sources, finance minister has taken notice of delay in implementation of PIA Act -2016. He was chairing meeting of cabinet committee for privatisation and said that urgent steps should be taken to make PIA a public limited company.

The committee agreed to initiate process for finding strategic partner who will get twenty-six percent shares of the airline. The strategic partner will also have representation in PIA Board of Directors and Management according to percentage of shares.

Abbas