The Board of Directors (BoD) of Pakistan International Airlines (PIA) has approved the privatisation and restructuring plan of the company.

The company shared the development in its notice to the Pakistan Stock Exchange (PSX) on Tuesday.

“The Board of Directors of the company in its 83rd meeting held on March 25, 2024 has approved the Scheme of Arrangement (SOA) for restructuring and privatisation of Pakistan International Airlines Corporation Limited along with its ancillary modalities, to be filed with Securities and Exchange Commission of Pakistan (SECP),” read the notice to the bourse.

It share price hit the upper lock and settled at Rs25.39 on Tuesday. However, it was already on its way to the price-cap much before the notice was made public at around 11am.

Restructuring plan

Last month, the then-cabinet approved PIA privatisation plan.

The restructuring plan completed by transaction adviser Ernst & Young divested the PIA into two entities; one ‘clean’ one and the other to be parked in a holding company with legacy debt, which includes negative equity of Rs825 billion ($2.95 billion) in loans, creditors’ money and losses.

The clean entity will be offered for sale.

“These steps will help attract the investors toward PIA,” the statement from the Prime Minister’s Office said back then.

In deep economic crisis, Pakistan agreed last June to overhaul the SOEs under a deal with the International Monetary Fund (IMF) for a $3 billion bailout.

The outgoing government decided to privatise PIA just weeks after signing the IMF agreement.

Earlier this month, Prime Minister Shehbaz Sharif, while presiding over a high-level meeting on privatisation of the PIA and restructuring of the Federal Board of Revenue (FBR), sought a final schedule for the implementation of the privatisation of the PIA.