The government of Pakistan has started talks with commercial banks to restructure the loans of Pakistan International Airlines (PIA). According to media reports on Wednesday, the government wants PIA to pay off its debts before selling it, and a 12-member committee consisting of representatives of the government and commercial banks has been tasked with preparing a loan restructuring plan within two weeks. The committee, headed by Secretary Privatization Commission Usman Bajwa, includes representatives of the Ministry of Finance, PIA, and six commercial banks: Habib Bank, National Bank, Bank of Punjab, Meezan Bank, Askari Bank, and Faisal Bank.

These banks have provided PIA with a loan of Rs 230 billion till the end of August, including a domestic loan of Rs 193 billion. The highest loan, Rs 56 billion, has been provided by Bank of Punjab, followed by Askari Bank with Rs 43 billion, JS Bank with Rs 34 billion, National Bank with Rs 33 billion, Faisal Bank with Rs 32 billion, Habib Bank with Rs 29 billion, and Bank Islami with Rs 22 billion. Al Baraka Bank has provided the least amount, Rs 9 billion, and Soneri Bank has provided Rs 5 billion.

In addition to the loan restructuring plan, the committee has also been directed to prepare a plan to obtain a loan of Rs 15 billion to meet the immediate needs of PIA. Officials said that there is no plan under consideration to continue all operations of PIA, but flights will be operated only on essential routes. PIA urgently needs Rs 15 billion to continue its operations, but banks are reluctant to lend amid ongoing restructuring talks. Sources say that PIA has also sought a budget support grant of Rs 7.5 billion from the government, but the finance ministry is reluctant to give this grant in the absence of a viable plan.

 
Credit: Independent News Pakistan (INP)