Fauji Fertiliser Company Ltd has formally withdrawn from the bidding process for Pakistan International Airlines privatisation. The company informed the Privatisation Commission of its decision before the deadline. The withdrawal came despite earlier expectations of strong participation.
According to officials, the decision was communicated on Saturday. That day marked the final date for depositing earnest money. Three other prequalified bidders submitted the required amounts on time. Fauji Fertiliser did not submit any payment.
A senior Privatisation Commission official confirmed the development. The official said sealed bids remain scheduled for December 23. Meanwhile, the process continues without any delay. Authorities expect competitive offers from the remaining bidders.
Transitioning to the implications, officials clarified the strategic aspect of the move. They said Fauji Fertiliser can now join any winning consortium later. However, bidding rules would have blocked such an option otherwise. Therefore, the withdrawal preserves future flexibility.
Earlier, the Privatisation Commission Board had prequalified four bidders for the transaction. These included Fauji Fertiliser Company Ltd and Airblue (Pvt) Ltd. Two large business consortia also qualified during the process. One consortium is led by Lucky Cement. Its partners include Hub Power Holdings, Kohat Cement, and Metro Ventures.
Another consortium is led by Arif Habib Corporation. Its members include Fatima Fertiliser, City Schools, and Lake City Holdings. Subsequently, AKD Group Holdings joined this consortium on November 7. The board approved the expanded group without objections.
Under the privatisation framework, the government is offering a 75% stake in PIA. The successful bidder will gain management control of the airline. Additionally, the government has offered a future option. The bidder may acquire the remaining 25% stake later.
The option period for the remaining shares will last 90 days. During this time, the bidder can decide on full ownership. Officials consider the retained stake highly valuable. Therefore, the structure allows flexibility for investors.
Explaining the process, officials said sealed bids will open the transaction. First, the Privatisation Commission Board will approve the reserve price. Then, the Cabinet Committee on Privatisation will give final approval. Afterward, authorities will open bids publicly before the media.
If bids exceed the reserve price, open bidding will follow immediately. Conversely, if bids fall below the reserve price, another rule applies. In that case, the highest bidder will receive the first right to match the price.
Regarding fund allocation, officials detailed the payment structure. Of the amount paid for 75% ownership, 92.5% will go into PIA. The remaining 7.5% will go to the government. This design aims to strengthen the airline’s balance sheet.
Furthermore, the government has clarified participation restrictions. Bidders who skip the process cannot later join winning groups. However, this rule no longer applies to Fauji Fertiliser. Its formal withdrawal removes that limitation.
Under the payment terms, the winning bidder must act swiftly. Two-thirds of the bid amount must be paid within 90 days. The remaining one-third can be paid within 12 months.
Turning to labour concerns, the government has offered assurances to employees. PIA staff will receive 12 months of job protection. The holding company will handle pensions and medical benefits. Meanwhile, new owners will pay current salaries.
PIA currently operates rights to 78 destinations worldwide. The airline also controls around 170 international landing slots. Officials stressed the airline needs urgent investment. They said professional management remains critical for long-term recovery.
