Pakistan International Airlines (PIA) First Sukuk Company Limited is likely to purchase two aircraft worth Rs 2 billion by issuing Sukuk Certificates in the market, a senior government official told Daily Times on Thursday.

These two aircraft would be leased out to PIA at an interest rate of 6 months KIBOR average plus 12.5 percent basis, a formula to be agreed upon. This arrangement is being undertaken to improve the financial health of the national carrier.

According to the official, Pakistan International Airlines Corporation (PIAC) has proposed to sell two aircraft at a market value of Rs 2 billion to a company, which is incorporated under the Companies Act, 1984 on June 20, 2007 namely, PIA First Sukuk Company Limited. The company has now been declared by the Securities and Exchange Commission of Pakistan (SECP) as a financial institution. This institution has been given task to undertake one time leasing transaction of purchase.