Funds to be utilized for ‘working capital requirements’ and improvement in passenger services.
Pakistan’s national flag carrier said on Monday it has raised $130 million in fresh financing from a banking consortium, as the airline staggers under the weight of earlier loans totaling more than $3 billion.
The Pakistan International Airlines (PIA) said in a statement that the financing facility was arranged by Pakistan’s United Bank Limited (UBL) and Credit Suisse Singapore as lead bankers, in addition to the state-run National Bank of Pakistan. “The [financing] facility… will be utilized by PIA for its general working capital requirements and in improvement in passenger services,” the statement said.
However, a PIA official requesting anonymity said the fresh loan might be utilized to help settle earlier loans.
PIA’s cumulative loans stand at around Rs. 329 billion, or $3.16 billion. It suffers heavy financial losses annually, posting a Rs. 32 billion loss in 2015.
Prime Minister Nawaz Sharif’s government tried to privatize the airline earlier this year but its 18,000 employees fiercely resisted. Two employees were killed in February as police tried to clamp down on protesting employees outside the airline’s head office in Karachi.