The federal government has decided to sell the Precision Engineering Complex (PEC), a business unit of Pakistan International Airlines (PIA), to the Pakistan Air Force (PAF) for Rs. 2.5 billion in cash. This sale price is significantly lower than the offer made by a sole bidder for 60 percent of PIA’s shares, which was reportedly four times higher.
The deal includes a cash payment of Rs. 2.5 billion over five years, and PAF will take on Rs. 3 billion in pension liabilities for 259 retired employees and Rs. 1.1 billion in liabilities for 251 active employees. Additionally, PAF will assume the financial responsibility for PEC’s ongoing operations.
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PEC specializes in manufacturing high-precision aerospace and industrial parts, and it has been valued at Rs. 6.5 billion, which includes Rs. 4 billion in pension liabilities. A ministerial committee has already approved the transfer to PAF, and a formal summary for federal cabinet approval is being prepared.
The move is part of a broader effort to offload non-core assets, as PEC was separated from PIA and included in the PIA holding company. As of December of the previous year, PEC’s assets were valued at Rs. 1.2 billion, with liabilities of Rs. 2.9 billion and a net negative equity of Rs. 1.73 billion.
This sale follows the government’s failed attempt to privatize PIA in October, during which most bidders withdrew due to financial concerns and the government’s refusal to meet their demands.
