Fauji Fertilizer not to participate in bidding for PIA privatization

Fauji Fertilizer Company has decided not to participate in the bidding process for the privatization of Pakistan International Airlines, which is scheduled to take place on Dec. 23.

Adviser to the Prime Minister on Privatization Mohammad Ali said Fauji Fertilizer could still join the process at a later stage if the successful bidder invites the company to participate.

He said the privatization framework allows flexibility for the winning party to bring in additional partners before completing full payment. However, only companies that were not part of the bidding process could become an additional partner, he clarified.

Speaking during an interview on Nukta’s flagship program “On My Radar” hosted by Kamran Khan, Ali said the company that wins the right to buy PIA would be allowed to form a consortium with up to three companies to jointly acquire stakes in the national carrier.

Ali said this provision applies to companies that are already operational, allowing them to seek new investors or conglomerates to join the winning bidder until the full payment is made. He said the policy is aimed at encouraging broader participation while ensuring continuity of operations during the privatization process.

The government had earlier approved four potential bidders: a consortium led by Arif Habib, AKD, Fatima Fertilizer, The City School, and Lake City Holdings, another consortium led by Lucky Cement, Hub Power, Kohat Cement, and Metro Ventures, and two companies — Fauji Fertilizer and Air Blue.

The government has decided to sell its 100% stake in PIA, but one-fourth of the shares will only be offered to the winning bidder at a 12% premium on the bid price, with an option to make the payment one year later.

The government has also decided to take only 7.5% of the bid money in cash, while the bidder will invest the remaining 92.5% amount in the PIA company instead of depositing it in the exchequer, government officials said earlier.

During the last failed attempt, the bidder had the option to pay 15% of the bid money in cash.

The decision to offload a 100% stake was taken after the four bidders sought no role for the government in PIA's affairs once the successful bidding takes place, according to Privatization Commission officials.

Bidding will take place next week for 75% of the shares, but the winner will be given the option to buy the remaining 25% shares within one month at a price 12% higher than the bid price, officials said. The premium will be charged for making the payment after one year, instead of paying cash upfront, they added.