CCoP approves Fauji Fertilizer’s entry into consortium acquiring PIA stake

The Cabinet Committee on Privatisation (CCoP) has approved the inclusion of Fauji Fertilizer Company Limited in the consortium acquiring a majority stake in Pakistan International Airlines. The committee endorsed the proposal and forwarded it to the federal cabinet for final approval, The News reported. 

The decision was taken during a meeting chaired by Deputy Prime Minister and Foreign Minister Ishaq Dar on Wednesday. 

Under the arrangement, Fauji Fertilizer will subscribe to 33.99% ordinary shares in PIA Equity Limited, the special-purpose vehicle established to complete the airline’s privatisation.

The move follows earlier approval by the Privatisation Commission Board for the company to join the consortium that secured the winning bid for the airline.

The investor group, led by Arif Habib Corporation Limited, won the bid of Rs135 billion, equivalent to about $480 million, for a 75% stake in the national carrier after competing against a consortium backed by Lucky Cement.

Despite the inclusion of additional partners, Arif Habib Corporation will continue as the lead member of the consortium under the terms agreed with the government.

PIA Equity Limited will function as the holding vehicle for the acquisition. The investor group includes Fatima Fertilizer, AKD Group, City Schools and Lake City Holdings along with the newly added Fauji Fertilizer stake.

According to officials, the first financial closing of the transaction is expected by the end of April. At that stage, the consortium will be required to pay about two-thirds of the bid amount, estimated at Rs83.3 billion.

The investor group will also indicate whether it intends to exercise the option to purchase the government’s remaining 25% stake in PIA at a premium of 12%.

As part of the agreement, the consortium plans to inject Rs124.875 billion into the airline as part of the restructuring process.