PIA - Pakistan International Airlines (PK, Islamabad International) has been transformed from PIA Corporation Ltd into PIA Company Ltd following the Pakistani President Mamnoon Hussain's signing of the PIA Corporation Conversion Ordinance on Friday, December 4.

The new law paves the way for the privatization of the airline after the terms of the original PIA Act of 1956 had required all airline shares to remain in government hands.

The sale of at least 26% of the loss-making airline was one of the conditions Pakistan accepted as part of a USD6.67billion Extended Fund Facility (EFF) from the International Monetary Fund (IMF) in 2013. Though the deal has been continuously deferred, Karachi has set a final deadline of March 2016 for the stake disposal.

Thus far, government sources have told Pakistan's Express Tribune that prospective investors include a Punjabi business consortium as well as an undisclosed Gulf state-backed entity. The deadline for submissions is this month.

Under the programme, once a suitable investor has been found, PIA's liabilities of PKR297 billion (USD2.81 billion) will then be transferred to a holding company while a new company is founded with a fresh balance sheet. Government will then sell off PIA's core business while retaining control of ancillary operations such as ground handling and hotels. These will then be sold off individually over time.