Fauji Fertilizer shows interest in buying PIA

KARACHI: In a landmark move bridging Pakistan’s agriculture and aviation sectors, Fauji Fertilizer Company Limited (FFC), the country’s leading fertilizer producer, has officially expressed interest in acquiring a stake in Pakistan International Airlines Corporation Limited (PIACL).

The development was disclosed in a filing to the Pakistan Stock Exchange (PSX), where FFC confirmed its Board of Directors has approved the submission of an Expression of Interest (EOI) and prequalification documents to the Privatization Commission of Pakistan. The company has also authorized a detailed due diligence process to evaluate PIACL’s financial, operational, and legal profile ahead of any investment decision.

The disclosure, signed by Brig. (Retd) Khurram Shahzada, FFC’s Company Secretary, was made in accordance with regulatory requirements under the Securities Act, 2015 and the PSX Rule Book.

Industry analysts view FFC’s move as a bold diversification strategy, signaling a rare entry of a major agro-industrial player into Pakistan’s troubled aviation sector. The timing is critical, as the federal government accelerates its privatization push for loss-making state-owned enterprises under broader economic reforms.

PIACL, burdened by chronic financial losses, mounting debt, and structural inefficiencies, has long been on the privatization agenda. A previous privatization attempt in late 2024 collapsed due to poor investor response, with only one bid of Rs 10 billion against a reserve price of Rs 85 billion, leading to a $4.3 million loss in advisory fees for the government.

To revive investor interest, the government has introduced major incentives in the 2025–26 federal budget, including a retrospective GST exemption on aircraft imports, leases, and maintenance-related equipment — effective from March 19, 2015.

Crucially, the government’s restructuring of PIACL into a debt-light entity — by transferring PKR 654 billion in liabilities and non-core assets to the newly formed PIA Holding Company Ltd. — has made the national carrier a more attractive investment prospect. The airline reported an EBITDA-positive performance in CY24 and an equity value of PKR 3.6 billion by the end of 2024.

Read more: PIA Revenue Falls 16% in FY2024-25

With PKR 147 billion in cash and short-term investments as of March 2025, FFC has the financial muscle to pursue this cross-sector venture. Analysts at AKD Securities noted that FFC’s involvement could catalyze broader investor participation and add fresh momentum to the privatization initiative.

If successful, this move would not only diversify FFC’s portfolio but also mark a transformative shift in corporate investment patterns in Pakistan — potentially setting a precedent for other industrial giants to explore strategic stakes in national assets.