PSO opposes parking PIA’s liabilities in a Holding Company

ISLAMABAD: Pakistan State Oil (PSO) has rejected government’s plan on parking of its liabilities towards PIA in a Holding Company, suggesting other options for payment of Rs 15.8 billion.

 Recently, Board of Management (BOM) of PSO was informed that as at January 31, 2024 the principal amount receivable from PIA is Rs. 15.8 billion with LPS of Rs. 11.9 billion, summing up to ks21.7 billion.

It was informed that the Federal Cabinet in its meeting held on August 09,2023, approved inclusion of PIACL in the Active Privatization Programme. Under the PIA revival plan, a new holding company will be registered with the SECP and all the assets as well as liabilities of the national carrier will be transferred to the new holding company. Then PIA will be incorporated into the holding company as a debt free subsidiary company.

BOM was apprised that in August 2023, the management had shared its concerns with the Petroleum and Finance Divisions with copy to Chairman-BoM. A reply from DG-Privatization Commission on January 30,2024 sought PSO’s views and comments on proposed parking of PSO’s liabilities in the holding company.

BOM was informed that a reply has been sent wherein PSO has disagreed with the proposal of parking its legitimate receivables in a holding company since it is not only difficult for PSO being a public listed company but is also a severe detriment to the company’s interests.

Furthermore, the correct figure of receivables from PIACL has been apprised along with the expression of willingness to explore viable options and negotiate a settlement of outstanding dues including ;(i) cash;(ii) Pakistan Investment Bonds (PIBs);(iii) percentage of equity share in the liability free new company; and (iv) asset transfer.

  MD & CEO added that the option of imposing a Rs. 3-4/ litre levy on Jet-Al has also been suggested to MoE-PD.

The sources said, BOM concurred and unanimously endorsed/approved management’s decisions of (a) not agreeing with the proposal of parking PSO’s legitimate receivables in a holding company and (b) exploring viable options and negotiating a settlement of outstanding dues against cash, PIBs, percentage of equity share, asset transfer or imposition of levy on Jet-A1.


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