Staff Report
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved the restructuring of Pakistan International Airlines Corporation Limited (PIACL).
According to a press release issued by the Privatization Commission on Sunday, the legal segregation of PIACL, one of the most complex restructuring exercise undertaken, has attained finality, with the SECP giving its approval of the Scheme of Arrangement on May 3 for the transfer of non-core assets and liabilities of PIACL to PIA Holding Company Limited.
This order marks a significant milestone in the collaborative efforts of the Privatisation Commission , Finance Division, Aviation Ministry and PIA to restructure the airline.
The scheme has been made effective from April 30, 2024 the press release added.
The SECP has directed the PSX, Central Depository Company and National Clearing Company of Pakistan to ensure smooth listing of PIA Holding Company Limited as per the applicable rules and regulations.
Meanwhile, the Competition Commission of Pakistan (CCP) has given the green light to the acquisition of 100 percent shareholding of Pakistan International Airlines Corporation Limited (PIACL) by PIA Holding Company Limited (HOLDCO).
The transaction, part of the Government of Pakistan’s privatization process, was reviewed by the CCP in its first phase assessment. HOLDCO, a public limited company wholly owned by the government, will acquire PIACL’s shareholding and specified assets, liabilities, and subsidiaries, including certain real estate assets.
According to the submitted application, the federal government approved the divestment proposal, and the transaction is being carried out through a Scheme of Arrangement filed with the Securities and Exchange Commission of Pakistan (SECP).
While core aviation activities and allied services will remain with PIACL, non-core assets, including real estate, will be transferred to HOLDCO. However, these assets constitute a statistically insignificant portion of the total real estate market in Pakistan.
The CCP determined that the proposed transaction will not lead to HOLDCO’s dominance in the relevant market and authorized it under Section 31(1)(d) of the Competition Act. Matters falling outside the CCP’s purview will remain subject to applicable laws.
It is pertinent to mention that the order, dated May 3rd, 2024 of the Competition Commission of Pakistan (CCP) in its first phase review in the matter of acquisition of 100 percent shareholding of M/s Pakistan International Airlines Corporation Limited by M/s PIA Holding Company Limited), has cleared the way for the completion of the acquisition, marking a significant development in Pakistan’s aviation sector restructuring.
