Achi news desk-
In a significant development regarding the privatization of Pakistan International Airlines (PIA), sources from the Ministry of Finance have revealed that the government has finalized a term sheet with commercial banks for reprofiling the national flag carrier’s loan.
According to the sources, the term sheet includes provisions for the transfer of NOCs (No Objection Certificates) and assets back to PIA from the commercial banks within the coming week.
By signing the term sheet, the banks will secure a loan for PIA for a period of 10 years, with an interest rate pegged at around 12 percent.
Under the initial structure outlined in the term sheet, it is stated that up to 51 per cent of PIA’s shares will be put up for sale. However, government ownership of the airline will still retain 49 percent of its shares, in line with the Privatization Commission’s plans.
The money generated from the privatization of PIA has been earmarked for the revival of the airline, as revealed by sources familiar with the matter.
In addition, prospective buyers of PIA will be required to inject at least 51 percent investment into the organization, as specified by the Ministry of Finance.
Further, it was revealed that repayment of the loan extended to the banks will be facilitated through dividends received once PIA achieves profitability, according to inside sources.
Moreover, the term sheet allows banks the flexibility to issue Sukuk, Islamic or conventional bonds as part of the financial arrangement after PIA becomes a profitable entity.
