57.536 million PIA shares to be put on sale for public

The Privatisation Commission (PC) has decided to sell 57.536 million shares of Pakistan International Airlines through the stock market by the end of this month to help deepen the capital market base and to pass on the benefit of assets sale to retail investors.
A leading analyst said that the government has planned to sell 5 percent shares on May 31 with green-shoe option of another 5 percent. He said that the government would sell shares to the general public at 5 percent discount over the prevailing market price, which is around Rs 22.50.
According to an information, the government, to restructure the company, has decided to issue guarantee of up to Rs 20 billion to cover restructuring PIA's local currency debt of Rs 4.86 billion and future debts undertaken to pay off overdue suppliers of approximately Rs 15 billion.
The government has committed to subscribe up to Rs 12 billion in equity over a five-year period covering mark-up payments on the restructured debts and bridge financing.
PIA successfully raised Rs 15.14 billion through term finance certificates. Consequently, it was able to obtain a bridge financing of Rs 4.73 billion in October 2001 to make critical overdue payments to its international and domestic creditors and suppliers (the 'bride financing'). In addition, the corporation has restructured its redeemable capital debts of Rs 4.9 billion.
As a result of the above and the untiring efforts of PIA's senior management, the airline was not only able to overcome its financial problems, it was also able to sustain the political and economic developments. Furthermore, the restructuring measures have enabled the airline to report a profit Rs 1.87 billion and Rs 1.29 billion in FY02 and FO03, respectively--after five years of huge losses amounting Rs 12 billion.
The government has released Rs 2.53 billion for PIAC on account of mark-up and for this it has approved total amount of Rs 7.88 billion. Moreover, the government approved Rs 8.70 billion for fleet support. From this PIAC has received Rs 5.25 billion.
The total number of Class A shares, issued to government at par under financial restructuring and fleet replaced plan for 778,020,805 to date.
Furthermore, it is expected that approximately 880 million more ordinary shares will be issued to the government, in consideration of the contributions that will be made to cover mark-up payments of the guaranteed loans and the fleet replacement plan.