Fauji Fertilizer Company has been cleared to join the consortium acquiring a 75% stake in Pakistan International Airlines, expanding the buyer group behind Pakistan’s largest privatization in nearly two decades as it approaches a key payment deadline.
The Privatization Commission board approved the fertilizer maker’s inclusion in the Arif Habib Corporation-led consortium that won the Rs135 billion ($480 million) bid for the flag carrier in December.
The decision, taken at a meeting chaired by Privatization Adviser Muhammad Ali, will be forwarded to the Cabinet Committee on Privatisation for final approval.
The addition of FFC had been widely expected. When Arif Habib Corporation outbid a rival group led by Lucky Cement, company officials had indicated that additional partners could be inducted later. Under the transaction structure, the consortium is allowed to nominate up to two new members.
Arif Habib Corporation remains the lead and majority stakeholder. Other members include Fatima Fertilizer, AKD Group, The City School, and Lake City Holdings.
The first closing of the transaction is due in late April, when the consortium must pay roughly two-thirds of the bid amount, about Rs. 83.3 billion. At that stage, the group is also required to declare whether it intends to purchase the government’s remaining 25% stake, which is available at a 12% premium.
The deal is structured to channel Rs. 124.875 billion directly into PIA rather than the national treasury, providing the airline with capital to stabilize operations.
The sale forms a cornerstone of Pakistan’s reform commitments under its International Monetary Fund program, aimed at reducing fiscal risks from loss-making state-owned enterprises. PIA had been incurring annual losses of around Rs. 50 billion prior to the transaction.
Separately, the Privatization Commission board recommended revising its fee structure to improve financial sustainability and support institutional reforms.
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Privatisation of PIA was a good thing… should have been done 2 decades ago ….. injecting FFC into the management gives the impression that ” old order ” will still prevail and that impression is not good.