KARACHI: Pakistan’s Privatization Commission on Tuesday recommended the inclusion of a military-linked fertilizer company in the consortium led by Arif Habib Corporation Limited, the successful bidder for a majority stake in Pakistan International Airlines (PIA), as the government advances long-delayed reforms of state-owned enterprises.

The development is part of Pakistan’s broader privatization push under its $7 billion International Monetary Fund (IMF) Extended Fund Facility approved in September 2024, which requires restructuring and divestment of loss-making state-owned enterprises. PIA has accumulated significant losses over the years and remains a financial burden on the national exchequer.

In December, a consortium headed by the Arif Habib Corporation emerged as the top bidder for a 75 percent stake in Pakistan International Airlines in a breakthrough for the government’s long-delayed privatization of the carrier. The consortium entered a 135 billion Pakistani rupee ($482.32 million) bid, topping the offer of a rival group led by Lucky Cement in an intense back and forth that was broadcast live on television.

The Privatization Commission on Tuesday endorsed the nomination of Fauji Fertilizer Company Limited (FFC) to join the consortium led by Arif Habib.

“The PC Board, after due scrutiny and review, endorsed the nomination and confirmed that FFC fulfils the applicable eligibility and regulatory requirements,” the Ministry of Privatization said in a statement.

The proposed inclusion remains subject to approval by the Cabinet Committee on Privatization (CCoP) and the federal cabinet.

FFC is one of Pakistan’s largest listed fertilizer manufacturers and is majority-owned by the Fauji Foundation, a military welfare organization that operates commercial enterprises to fund services for retired armed forces personnel and their families. Its inclusion strengthens the financial profile of the bidding consortium.

The sale of a majority stake in PIA would mark the first major privatization in Pakistan in nearly two decades.

But the process has been shaky. A similar televised event in 2024 attracted a solitary bid from real estate developer Blue World City of $36 million, well short of the government’s declared minimum price of $305 million for a 60 percent stake.

As part of its efforts to revive the flag carrier airline, Pakistan’s government has assumed most of its legacy debt.

PIA has now posted its first pre-tax profit in two decades, and Britain and the European Union have lifted a five-year ban that had shut it out of key routes, supporting a higher valuation.