The Securities and Exchange Commission of Pakistan (SECP) has approved PIA Holding Company Limited’s (PIAHCL) scheme of arrangement to transfer its Precision Engineering Complex (PEC) into a separate entity, Precision Engg Comp (Private) Limited (PECPL), a company designated under the Pakistan Air Force (PAF).
PIAHCL disclosed the development in a notice to the Pakistan Stock Exchange (PSX) on Wednesday.
Under the sanctioned scheme, all PEC assets, liabilities, contracts, and employees are transferred to PECPL, effective May 1, 2025. The order notes that PECPL “will, as consideration, assume responsibility for pension liabilities of Rs2.9 billion for 259 retired PIAHCL employees associated with the PEC business unit, along with future pension and provident fund liabilities of Rs1.1 billion for 251 current PIAHCL employees working in the PEC business unit.”
The terms and conditions of employment for all PEC employees “shall remain the same as those applicable under PIAHCL.”
The sanctioned scheme also includes an amendment to Article 20.1 concerning land encumbrances, stating that Holdco shall, “subject to obtaining the prior approval of the Issue Agent (on behalf of the Sukuk Investors) and the Investment Agent (on behalf of the Participants) at the time of release, procure the release and replacement (if required) of FEC Land from the pool of Musharaka assets and remove all Encumbrances thereon.”
Earlier in October, PIAHCL approved the transfer of PEC to a new entity owned by PAF, formalising the carve-out as part of a government-approved restructuring plan.
The PEC at Pakistan International Airlines (PIA) manufactures high-precision parts for the aerospace industry and other industries.
It is an integrated facility that houses major engineering disciplines under one roof, including investment casting, conventional and CNC machining, optics, PCB, electrical, electronics and composites.
The PEC is a supplier to the USA and Europe and serves companies such as General Electric, Airbus Industries and Boeing.
Comments
Comments are closed for this article.