Fauji Fertilizer to bid for stake in PIA
Fauji Fertilizer Company Ltd. (FFC), a subsidiary
of the Pakistan military-run Fauji Foundation, announced on Monday that its
board has approved submitting an expression of interest to acquire a stake in
the financially troubled Pakistan International Airlines (PIA), according to a
filing with the Pakistan Stock Exchange (PSX).
The Pakistani government is seeking to sell a
controlling stake of 51-100 percent in PIA as part of a $7 billion
International Monetary Fund (IMF) program aimed at restructuring state-owned
enterprises. Authorities recently extended the deadline for submitting
expressions of interest to June 19.
FFC's filing stated: "The board … has
approved submission of an expression of interest and pre-qualification
documents to the Privatization Commission … and undertaking a comprehensive
due-diligence exercise."
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fast-tracks PIA privatization amid financial crisis
FFC, Pakistan’s largest fertilizer producer,
has diversified into energy, food, and finance sectors. Should the deal go
through, it would mark the group’s entry into aviation. However, the final
outcome will depend on the government’s privatization process and regulatory
approvals.
This is Pakistan’s second attempt to privatize
PIA. A 2024 auction attracted only one bid — Rs10 billion ($36 million) for a
60 percent stake from real estate developer Blue World City — which was far
below the government’s Rs85 billion ($305 million) reserve price and was
rejected.
In preparation for the sale, the government
had already transferred nearly 80 percent of PIA’s legacy debt to public
accounts and cleared remaining debt from the airline's books to make it more
appealing to potential investors, according to Pakistan’s privatization
ministry.
In April 2025, PIA reported an operating
profit of Rs9.3 billion ($33.1 million) for 2024, its first in over two
decades. This turnaround followed years of government bailouts as the airline’s
earnings were often absorbed by debt servicing costs. Officials attribute the
positive performance to recent reforms, including staff reductions,
discontinuation of unprofitable routes, and other cost-cutting measures.
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Before the 2024 privatization attempt, PIA
faced a near-shutdown, with planes seized at international airports for unpaid
bills, and flights grounded due to a shortage of funds for fuel and spare
parts.
Currently, PIA operates a fleet of 34 planes,
commanding just 23 percent of the domestic market. In contrast, Middle Eastern
carriers dominate about 60 percent of the market, largely due to their
extensive route networks and direct connections.
Source: Arab News