Karachi April 1 2024: Pakistan International Airlines to bifurcate its business into two segments under PIA Holding Company Limited, according to company filing to the exchange.
The interests of the existing shareholders of PIA will be protected as their equity holding in PIA will be canceled and fresh shares will be issued in Holdco (the “Holdco Shares”) in the same proportion as the erstwhile shareholders of PIA held in PIA; simultaneously, PIA will become the wholly-owned subsidiary of Holdco.
Pakistan International Airlines Corporation Limited will hold an Extraordinary General Meeting on Saturday, April 20, 2024 to approve the bifurcation / separation of the business / undertaking of PIA into two segments / undertakings i.e. the Core Undertaking and the Non-Core Undertaking and the transfer to and vesting in PIA Holding Company Limited the Non-Core Undertaking, along with all ancillary and incidental matters thereto, placed before the meeting for consideration and approval, be and is hereby approved and adopted, along with any modifications / amendments required or conditions imposed by the Securities and Exchange Commission of Pakistan.
Under the Scheme of Arrangements, it has been proposed by the Privatisation Commission that Pakistan International Airlines Corporation Limited (the “PIA”) be reorganized as per the Scheme of Arrangement (as presented before the Board of Directors on March 25, 2024) with PIA Holding Company Limited (“Holdco”), and the Board of Directors of the PIA in its meeting held on March 25, 2024, has decided to enter into an arrangement with Holdco, in terms of the Scheme of Arrangement (“Scheme”) under Sections 279 to 283 and 285(8) of the Companies Act, 2017 (“Act”), for the corporate restructuring / reorganization of the PIA and Holdco.
Subject to the sanction of the Scheme by Securities and Exchange Commission of Pakistan (“SECP”), under the Scheme, the business / undertaking of the PIA shall be bifurcated / separated into two segments / undertakings i.e. the Core Undertaking and the Non-Core Undertaking. Simultaneously, the Non-Core Undertaking (as defined in the Scheme) shall be merged / amalgamated with and into the Holdco, by transferring to and vesting in Holdco the assets, business, rights, properties, investments, liabilities, benefits, powers, contracts, authorizations, obligations etc. comprising the Non-Core Undertaking, with effect on and from the Effective Date (as defined in the Scheme), against the entire share capital of PIA being issued in favour of Holdco (the “Arrangement”). The Core Undertaking shall remain with the PIA.
The proposed Arrangement, along with all ancillary and related matters thereto, shall be effective by way of the Scheme, in accordance with the provisions of Sections 279 to 283 and 285(8) of the Companies Act, 2017. The Scheme has been filed with the SECP on March 28, 2024. The rearrangement of assets and liabilities through the Scheme will not have any impact on the valuation of shares held by existing shareholders of PIA as all assets and liabilities of PIA and its subsidiaries will remain under the umbrella of Holdco as part of the Scheme. The interests of the existing shareholders of PIA will be protected as their equity holding in PIA will be canceled and fresh shares will be issued in Holdco (the “Holdco Shares”) in the same proportion as the erstwhile shareholders of PIA held in PIA; simultaneously, PIA will become the wholly-owned subsidiary of Holdco.
