PIA's assets — such as land, buildings, and ships — will be mortgaged as collateral for these bonds, say sources
ISLAMABAD: The federal government, seeking to overcome the financial challenges faced by Pakistan International Airlines (PIA) has decided to launch Sukuk bonds.
Official documents, a copy of which are available with Geo News, revealed that the federal government aims to gather funds worth Rs20 billion through the 10-year Islamic bonds.
"Shariah-compliant Secured Sukuk up to Rs20 billion inclusive of Rs5 billion greenshoe option, with subsequent listing (Privately Placed Listing) on the Pakistan Stock Exchange (“PIA Sukuk–I” or “Sukuk Issue”)," the advertisement for the bonds read.
Sources familiar with the development informed Geo News that PIA's assets — such as land, buildings, and ships — would be mortgaged as collateral for these bonds.
Back in April, the National Assembly was informed by Aviation Minister Ghulam Sarwar that there were no plans to privatise PIA.
He had told the NA during the question hour that the incumbent government was very keen to make the national flag carrier a self-reliant and profitable entity.
Efforts are underway to improve the financial status of the airline by reducing its losses through various means, he had said.
Sarwar had noted that loss-making routes have been closed and flights on profitable routes have been added which has resulted in a reduction of losses.
Responding to a question, the aviation minister said 82 pilots were dismissed for acquiring licenses through unfair means.