ISLAMABAD – The state-run Pakistan International Airlines has failed to secure loans from commercial banks as the lenders impose strict conditions.
As per media reports, the government has rejected the offer made by commercial banks to provide Rs 15 billion as the entities demanded more than what was expected.
Though official details have not been revealed regarding the offer made by banks, sources confirm that the entities had demanded sovereign guarantees, a letter of comfort, two aircraft as collateral, and a waiver from the State Bank of Pakistan (SBP).
Moreover, the banks also linked the loan disbursement to an agreement on a settlement plan for Rs263 billion in old debts and sought protection under the laws of the United Arab Emirates (UAE) and England, Express Tribune reported.
The finance ministry did not agree to the demands of the consortium of the banks which included Habib Bank Limited, National Bank of Pakistan, Meezan Bank Limited, Faysal Bank Limited, Bank of Punjab, and Askari Bank Limited.
The national carrier was seeking these funds to take possession of two confiscated aircraft of the carrier and meet other financing needs; one of the aircraft had already been handed over to Pakistan in an earlier settlement.
Meanwhile, the government has time and again confirmed to privatise the national carrier and privatisation minister Fawad Hassan Fawad is making efforts to clear the way for the said move.
As part of the legislative measures, the government has to end high courts’ constitutional powers related to privatization matters and has also approved new rules to exclude an entity from the pro-competition privatisation law.
The government has also hired consultant to privatise the airline which has been facing challenges for quite a long period of time now. Recently, the accounts of the carrier were also frozen by the Federal Board of Revenue (FBR) while the Pakistan State Oil (PSO) had also threatened to block the supply of oil to the carrier.
