SECP approves PIA’s transfer of Precision Engineering Complex to new entity

The Securities and Exchange Commission of Pakistan (SECP) has approved the scheme of arrangement proposed by PIA Holding Company Limited (PIAHCL) to transfer its Precision Engineering Complex (PEC) into a separate entity, Precision Engg Comp (Private) Limited (PECPL), under the Pakistan Air Force (PAF).

The development was disclosed in a notice to the Pakistan Stock Exchange (PSX) on Wednesday. Under the approved scheme, all PEC assets, liabilities, contracts, and employees will be transferred to PECPL, with the transfer becoming effective on May 1, 2025.

As part of the arrangement, PECPL will assume responsibility for pension liabilities amounting to Rs2.9 billion for 259 retired employees and future pension and provident fund liabilities totaling Rs1.1 billion for 251 current employees associated with PEC. However, the terms and conditions of employment for all employees will remain unchanged, as per their existing terms under PIAHCL.

The sanctioned scheme also includes an amendment to Article 20.1, addressing land encumbrances. It stipulates that PIAHCL will, with prior approval from Sukuk investors and participants, ensure the release and replacement (if necessary) of FEC land from the Musharaka assets pool and remove encumbrances on the land.

In October 2025, PIAHCL had approved the transfer of PEC to a new PAF-owned entity, formalizing the carve-out as part of a government-approved restructuring plan.

PEC, part of Pakistan International Airlines (PIA), is a leading manufacturer of high-precision parts for the aerospace and other industries. The facility provides integrated services including investment casting, CNC machining, optics, PCB, electrical, electronics, and composites, and serves major clients like General Electric, Airbus, and Boeing.