Islamabad June 16 2026: Fauji Fertilizer Company Limited, the largest urea manufacturer in country, board of directors have approved submission of Expression of Interest and prequalification documents for acquisition of stakes in Pakistan International Airline.
“Board of Directors of Fauji Fertilizer Company Limited (FFC) during 234th Board of Directors Meeting held on June 13, 2025 has approved submission of Expression of Interest (EOI) and prequalification documents to the Privatization Commission in relation to the potential acquisition of stakes in Pakistan International Airlines Corporation Limited, and undertaking a comprehensive due diligence exercise in this regard” states the notification.
Pakistan International Airlines Corporation Limited (PIA), a public limited company, is the flag carrier airline of Pakistan. The Government of Pakistan (GOP) through PIA Holding Company Limited owns approximately 96% of the issued capital of PIA.
PIA is a full service airline, providing aviation services supported by its ancillary segments. The business segments include passengers, ground handling, flight training, cargo engineering and flight kitchen. Out of the total 21 million passengers traveling during 2024, PIA has successfully maintained a prominent market share and has been the market leader for 68 years. In the last financial year, PIA served approximately 4 million passengers across 30 destinations, carrying out 268 flights per week. PIA has access to 78 countries with slots in some of the most attractive international destinations, providing direct flight access to passengers travelling between Pakistan and the large diaspora target markets. Demand in the under-served Pakistani aviation market is expected to grow at a Compound Annual Growth Rate of around 6.2% from Fiscal Year 2025 to Fiscal Year 2029. Pakistan’s population and its extensive global diasporas provide a solid foundation for growth of the aviation business.
With the objective to restructure and privatise PIA, GOP incorporated PIA Holding Company Limited (PIA Holdco), a company limited by shares. PIA and PIA Holdco filed a Scheme of Arrangement with the Securities and Exchange Commission of Pakistan (SECP) under the Companies Act, 2017, which was sanctioned by SECP through its order dated May 3, 2024 (SOA Sanction Order). Pursuant to the SOA Sanction Order, non-core assets and non-core liabilities were transferred to PIA Holdco (Non-Core Business) and PIA continues to hold the core assets and core liabilities (Core Business). The Core Business includes assets, liabilities, employees pertaining to air transport operations and allied services (including ground handling, flight training, cargo engineering and flight kitchen), rights and obligations under various operational agreements executed by PIA including the air services agreements, code sharing agreements, fuel supply agreements and passenger sales agency agreements. Pursuant to the SOA Sanction Order, the shareholders of PIA became the shareholders of PIA Holdco and PIA became a wholly-owned subsidiary of PIA Holdco, with a single class of ordinary shares. PIA Holdco was listed on the stock exchange and PIA ceased to be listed.
The SOA Sanction Order, which includes the split balance sheet setting out the Core Business and the Non-Core Business. PIA may enter into operational arrangements such as office space and sales offices with PIA Holdco on an arm’s-length basis if considered necessary for smooth and continued operations, which shall be determined during the course of the privatisation process of PIA. GOP and PIA Holdco through the Privatisation Commission (Privatisation Commission) invite Expressions of Interest (EOI) from prospective investors to acquire between 51% to 100% share capital of PIÁ (consisting as a single class of ordinary shares) together with management control (Èquity Stake). The Equity Stake may comprise, inter alia: (i) sale of shares held by PIA Holdco; (ii) subscription of shares of PIA; or (iii) a combination of both (i) and (ii).
The final terms and conditions for transfer and acquisition of the Equity Stake shall be set out in the bid documents, wherein GOP / PIA Holdco may offer (in their sole and absolute discretion), inter alia, the following incentives: a, exemption from General Sales Tax on induction of aircrafts through lease/purchase; b. additional support to improve the effective net equity position on PIA’s balance sheet, which may include indemnification/transfer of certain liabilities; and c. coverage against certain tax and litigation claims. In addition to the above, GOP/ PIA Holdco may also offer (in their sole and absolute discretion), other transaction specific protections / incentives from time to time, based on feedback from the pregualified bidders.
