KARACHI: Pakistan State Oil (PSO), said it is in talks with government on plan to acquire stakes in public sector energy companies and offset mounting debt it is owed by firms such as national airline.

Stopping pile-up of unresolved debt across Pakistan’s power sector and ultimately settling it, is top concern of International Monetary Fund, with which Islamabad begins talks this month for new long-term loan deal. “Everything will be done through competitive bidding and we will participate and if we win, stakes will be offset against (PSO’s receivables),” said Syed Muhammad Taha Managing Director and Chief Executive of state-backed PSO.

“That is our proposal and this is under consideration, so we are working with government,” Taha said in an interview with Reuters. Pakistan’s government, with stake of about 25 percent, is biggest shareholder of PSO, but private shareholders own rest. Government officials, including petroleum minister and information minister, did not reply to Reuters request for comment. Total circular debt in Pakistan’s power and gas sectors stood at Rs 4.6 trillion ($17 billion), or about 5 percent of GDP by June 2023, IMF said.