UAE Offers to Buy Shares in State Owned Companies on PSX

The United Arab Emirates (UAE) has offered to purchase minority shares in publicly traded state-owned enterprises at a negotiated price, as well as a seat on the board of each company.

According to well-informed sources, the offer may provide a significant boost to the cash-strapped government and will represent a break from Islamabad and Abu Dhabi’s customary lender-borrower relationship.

Sources said that the UAE made a solid offer to acquire holdings in the companies. However, Pakistan has sought to include a clause in any such agreement that allows it to reacquire these stakes after a set amount of time, they added.

The offer came after Prime Minister Shehbaz Sharif’s plea for a multibillion-dollar package during his visit to the UAE two months ago. In response to the PM’s request, the UAE dispatched a delegation to Pakistan who met with the leadership in Lahore sometime during May.

This follows China’s decision to roll over another $2 billion of Pakistani debt maturing from June 27 to July 23, delivering a sense of relief after transferring $2.3 billion the previous week.

Pakistan is also trying to revive its deal with the International Monetary Fund (IMF), with new inflows imminent after Finance Minister, Miftah Ismail, confirmed earlier that the lender had sent the Memorandum of Economics and Financial Policies (MEFP) for the Seventh and Eighth Reviews to Pakistan earlier today. This means that the release of the next tranche is very likely now.