Debt-equity swap, bond issue options under study
ISLAMABAD: Air travel has come to a standstill with countries locked down to fight the coronavirus pandemic, the Pakistan International Airlines (PIA) is also the worse-hit.
Till May 7, 2020, receivable of the Pakistan State Oil (PSO) against the PIA stood at Rs19.6 billion, which is increasing, according to data available with Business Recorder.
A spokesman for PIA says that losses and debt of the PIA has become too great for the company to handle alone, and may ask for a bailout package from the government like other airlines are doing globally.
An insider said that options include suggestion to the government a debt-to-equity swap and issuance of long-term bond or delay in loan payment of the PIA.
The PIA pays around Rs5 billion a month to retire debt and liabilities of over Rs400 billion. A report of the State Bank of Pakistan reportedly state on Tuesday that the PIA’s domestic debt shrank by Rs19.2 billion to Rs137.7 billion by March 2020 compared to Rs156.9 billion in March 2019.
The coronavirus has badly impacted the airline operations, which has been virtually suspended for the past seven weeks.
The national flag carrier reported losses of Rs12.5 billion since the closure of domestic and international flight operations.
The aviation authority has also incurred losses worth Rs6.9 billion during the said period, as international airline operations were also suspended.