On Tuesday, the Privatization Commission formally signed a contract for the provision of financial advisory services for the divestment of the financially troubled Pakistan International Airlines (PIA) to a consortium headed by the British accounting firm Ernst & Young.
Govt. Signed EY To Advice on Privatization of PIA
The consortium is tasked with restructuring, conducting legal, technical, and financial due diligence, and fairly valuing the PIACL as part of the agreement, which was signed in a ceremony that was witnessed by Minister for Privatization Fawad Hasan Fawad.
On November 10, the Privatization Commission Board approved the consortium led by Ernst & Young to serve as the financial advisor.
Despite the difficult economic climate, Minister Fawad expressed confidence in the transaction’s successful completion.
He emphasized the dedication of all participating institutions to offer the financial advisor resolute support.
In order to streamline their work and guarantee that the procedure proceeds in the best interests of all parties involved, the Minister promised smooth cooperation.
Notably, the Civil Aviation Authority’s (CAA) resources used to fund a bridge financing package worth Rs. 8 billion that the Economic Coordination Committee (ECC) recently approved for the PIA in order to settle outstanding payments.
However, the ECC authorized a bilateral agreement between the CAA and the PIA, with caretaker Finance Minister Dr. Shamshad Akhtar serving as chairman.
Support has shown for the Aviation Division’s request for financial assistance from the CAA to meet the airline’s urgent needs.
The Privatization Commission Meeting
A meeting between the Privatization Commission and HLB Ijaz Tabassum and Company, the financial advisor for the sale of specific federally owned or controlled properties, presided over by Minister Fawad.
It is important to remember that the cabinet authorized the sale of 27 government-owned and controlled properties in February 2020 via the Privatization Commission.
Thirteen of the twenty-three properties that were put up for auction in the first round of the auction in September 2020 were subsequently unable to be sold for a variety of reasons.
However, 17 properties that the financial advisor hired to assist with in December 2021, still unsold.
Precautions To Take
Furthermore, the minister directed the secretary of the Privatization Division to review the procedure in conjunction with the Financial Advisor after taking serious note of the flaws in the current one.
The minister also ordered a reassessment of the properties, focusing on the title and other potential causes for the previous bidding process’s unsuccessful sale.
Additionally, he gave the order to hold the Commission accountable for any mistakes or delays that have led to the auction process failing repeatedly.
To read our blog on “For PIA privatization, 8 Int. companies shows their interest,” click here.