UK’s EY finalised as financial adviser for PIA privatisation

• Govt steps to PIA privatisation process.
• EY okayed as financial advisor for divestment.
• IMF has asked govt to privatise sick SOEs.

ISLAMABAD: The Pakistani government has okayed the UK’s Ernst & Young (EY) as financial adviser for the privatisation of Pakistan International Airlines (PIA) to ready the financially struggling entity for sale, The News reported.

The Privatisation Commission Board that met with caretaker Minister for Privatisation Fawad Hasan Fawad in the chair on Friday granted approval to appoint the financial advisor for the divestment of the Pakistan International Airlines Corporation (PIACL).

According to the publication, eight parties had submitted proposals to be the financial advisor.

The Evaluation Committee, formed by the privatisation commission, declared the consortium led by Earnest & Young as the “top-ranked” party based on criteria.

The commission has also established a negotiating committee to finalise the financial services agreement with the top-ranked bidder.

Notably, caretaker Prime Minister Anwaar-ul-Haq Kakar’s directive to speed up the PIA privatisation has been met with action.

The Economic Coordination Committee (ECC) recently cleared a Rs8 billion bridge financing package for the PIA, drawing from the resources of the Civil Aviation Authority (CAA) to settle overdue payments.

Under the chairmanship of Finance Minister Dr Shamshad Akhtar, the ECC had approved a bilateral arrangement between the CAA and the PIA.

The Aviation Division’s proposal for financial support through the CAA to address the airline’s pressing needs has gained traction.

The board also granted a 24-month extension to financial services agreements to the House Building Finance Corporation Limited (HBFCL) and the First Women Bank Limited (FWBL) each.

The board also discussed longstanding issues related to the 35-year pending privatisation of the Pak-China Fertiliser Limited (PCFL).

Pakistan said in August it would privatise the airline as part of a fiscal discipline plan agreed under an International Monetary Fund (IMF) bailout.

The airline has long been in crisis.

PIA flights to Europe and the UK have been suspended since 2020 after the European Union's Aviation Safety Agency revoked the national carrier's authorisation to fly to the bloc following a scandal over pilot licences.