PIA, Pakistan International Airlines, has denied allegations of a $60.8m debt default, blaming a misunderstanding of a balance sheet restructuring plan which has not yet been accepted by Pakistan’s Ministry of Finance.
PIA owes approximately $931m to lenders and typically, the government has offered financial support to the airline, however recent financial changes and attempts to partially privatise the airline have caused a reduction in the number of bailouts.
Due to the situation, PIA has had to rely more on commercial banks and the balance sheet restructuring plan is the latest solution to the debt crisis.
However, a consortium of six banks has proposed new loans of $53.1m to PIA in return for certain guarantees, which the finance ministry declined as it was seen as not in PIA’s interest.
