Pakistan Air Force (PAF) will buy Pakistan International Airlines (PIA) engineering unit for Rs 6.5 billion. The government has decided to sell a business unit of the PIA for Rs. 2.5 billion in cash, equal to one-fourth of the price that the sole bidder offered to acquire 60% of the share in the airline.
The total sales value of Precession Engineering Complex is Rs 6.5 billion including Rs 4 billion in pensions-related liabilities of its current and retired employees. PEC is a business unit of PIA that manufactures high-precision parts for the aerospace industry and a number of other industries.
According to media reports, a ministerial committee has already approved the transfer of PEC to PAF at a total price of Rs 6.5 billion. A formal summary is now being moved for the federal cabinet’s approval.
PEC has already been separated from the core PIA. It is among the non-core assets that the government has parked in the PIA holding company along with Rs623 billion in liabilities of the national flag carrier.
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PAF will acquire PEC at a total price of Rs 6.5 billion. PAF will pay Rs 2.5 billion in cash within five years and will assume Rs 3 billion in liabilities of pensions and provident funds of the already retired 259 employees of the PEC for the next ten years.
The prime minister has created a four-member ministerial committee under the chairmanship of Finance Minister Muhammad Aurangzeb. The committee has approved the transaction structure for transferring the ownership of PEC to PAF.
Among the committee members were the minister for defense and aviation, and the minister for privatization. The ministerial committee had been tasked to finalize the mode of transfer of assets, liabilities, and human resources to PAF.
The ministerial committee has been tasked to finalize the mode of transfer of assets, liabilities, and human resources to PAF.