ISLAMABAD:
In response to Pakistan’s request for multibillion dollars in fresh loans, the United Arab Emirates has offered to buy minority shares in publicly-listed government-owned companies at a negotiated price and a seat on each of the firm’s boards.
The offer, if accepted, could give a big boost to the cash-starved government and will mark a departure from the traditional lender-borrower relationship between Islamabad and Abu Dhabi.
The development comes amid China’s decision to rollover another $2 billion Pakistani debt that matures from June 27 to July 23, providing a sigh of relief after transferring $2.3 billion last week.
Highly-placed sources told The Express Tribune that the UAE government has offered to acquire 10-12% shares in government-owned companies that are listed at the stock market through its sovereign wealth funds.
“There is a proposal from a friendly country to purchase Pakistani companies’ stocks on buy-back basis, which means buying secured-loan based securities,” said Finance Minister Miftah Ismail while talking to The Express Tribune.
The sources said that the UAE had made a clean offer for acquisition of stakes in the firms. But the government wanted to add a provision in any such contract where it will have a right to buy back these stakes after a certain period, they added.
The UAE has made the offer on the lines it invested $2 billion in Egypt through the purchase of stakes in a number of state-owned companies in April this year aimed at bailing out the Egyptian government. The UAE had acquired stakes in the Egyptian companies through the Abu Dhabi Developmental Holding — a sovereign wealth fund based in Dubai.
The offer came in response to Prime Minister Shehbaz Sharif’s request for a multibillion-dollar bailout package during his visit to the UAE in April. The sources said that in response to the prime minister’s request, the UAE had sent a delegation to Pakistan that met with Shehbaz Sharif in the first week of May in Lahore.
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