Key Points
• UAE expected to acquire a stake linked to Fauji Foundation as part of a financial arrangement
• $1 billion rollover liability approaching maturity, according to Ishaq Dar
• Rollover refers to deferred repayment of UAE deposits or loans to Pakistan
• Move tied to broader Pakistan–UAE economic engagement and balance-of-payments management
ISLAMABAD: Pakistan is set to facilitate the acquisition of Fauji Foundation shares by the United Arab Emirates as a $1 billion rollover liability approaches its maturity, Deputy Prime Minister and Finance Minister Ishaq Dar said.
Dar outlined a transaction aimed at easing near-term external financing pressures and strengthening bilateral economic ties.
Explaining the rollover, Dar said the $1bn amount refers to financial support previously extended by the UAE to Pakistan in the form of deposits or loans that were scheduled for repayment but were deferred through rollover arrangements. Such rollovers allow Pakistan to postpone repayment for a defined period, helping manage foreign exchange reserves and external debt servicing obligations.
He noted that the latest rollover period is nearing its end, prompting discussions to convert part of the exposure into longer-term investment rather than another short-term extension. Under the proposed plan, UAE entities would acquire shares linked to the Fauji Foundation, shifting the relationship from creditor-borrower to investor participation.
Dar said this approach would help Pakistan meet external obligations without an immediate outflow of foreign exchange, reducing pressure on reserves. He added that equity-based participation aligns investor interests with Pakistan’s medium- to long-term economic performance rather than short-term repayment cycles.
Officials familiar with the matter said the structure under consideration seeks to replace short-term liabilities with equity-denominated instruments. The Fauji Foundation, one of Pakistan’s largest conglomerates with interests spanning fertiliser, energy, food and financial services, is seen as an attractive asset due to its stable earnings profile.
Dar emphasised that the transaction is being pursued within the broader framework of Pakistan-UAE economic cooperation, which includes investment commitments, project financing and financial support linked to macroeconomic stabilisation. He described the proposed acquisition as a confidence-building step that complements reforms agreed with international financial partners.
Pakistan has increasingly relied on deposit rollovers from friendly countries to bridge external financing gaps. Policymakers argue that converting such rollovers/loans into direct investment can lower refinancing risks, improve the external account outlook and signal long-term commitment from strategic partners.
Further details regarding valuation, stake size and transaction timelines are expected once regulatory and procedural requirements are completed. Any final agreement would be subject to approvals from relevant boards, regulators and authorities.
