The Pakistan International Airlines Corporation (PIA) has closed a deal of $ 100 million Shari''a-compliant financing facility. The facility was arranged by Abu Dhabi Islamic Bank, Al Hilal Bank, Citibank NA, and United Bank Limited as Mandated Lead Arrangers and Joint Bookrunners. Warba Bank in Kuwait joined as Lead Arranger. Citibank NA is also performing the role of the Account Bank and Security Trustee.
Clifford Chance and Haidermota & Co acted as legal counsel to the arrangers. PIA was represented by Mandviwalla & Zafar. This innovative Islamic transaction is secured by PIA''s ticket sales generated in the UAE and aggregated through IATA''s Billing and Settlement Plan, and through sales by General Sales Agents.
The three-year facility will be used for PIA''s general corporate purposes and reflects investor confidence in the airline and its strategic importance to Pakistan. The facility represents the first foreign currency commercially syndicated financing for a Pakistani corporate since 2007. The transaction is also important for the aviation sector as it uniquely broadens airline corporate credit to regional Islamic financiers.
M. Salim Sayani, PIA''s Deputy Managing Director, Nayyar Hayat, Chief Financial Officer of PIA and Shahid Munir, Deputy General Manager PIA were in Dubai earlier this month for the signing ceremony. "This facility re-introduces the airline in the international financial markets and further develops our banking relationships in the region" said Sayani. "This funding will allow the airline to implement its five-year business plan, which includes financial restructuring and a fleet renewal program through which the airline will add five wide-body and thirty nine narrow-body modern aircraft" added Sayani.-PR
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