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Arab News
4 days ago
- Business
- Arab News
Pakistan plans to finalize Roosevelt Hotel privatization structure at next cabinet committee meeting
KARACHI: Pakistan is expected to finalize the transaction structure for the privatization of the Roosevelt Hotel in New York at the next meeting of the Cabinet Committee on Privatization, the government said in a statement on Saturday. Located in Midtown Manhattan, the hotel is owned by Pakistan International Airlines Investment Limited (PIAIL) and occupies a full city block on Madison Avenue and 45th Street. It has also remained one of Pakistan's most high-profile yet politically sensitive overseas assets. 'The base price and expected proceeds from the privatization of the Roosevelt Hotel will depend on the transaction structure and final terms approved by the government,' the Privatization Commission said in an official handout. 'The transaction structure is expected to be finalized at the next meeting of the Cabinet Committee on Privatization.' The statement informed no base price had yet been set for the property, rebutting some local media reports that claimed the government had fixed a $100 million floor. It also pointed out such a value could only be determined at the time of bidding, adding that the deal's potential value would depend on the transaction structure and final terms approved by the cabinet committee. Over the past two decades, successive Pakistani governments have floated plans to sell, lease or redevelop the property, but no proposal has advanced beyond early-stage planning. Earlier this month, Muhammad Ali, the prime minister's adviser on privatization, told Arab News that the government had completed the hotel's baseline valuation and appointed US-based consultancy JLL to conduct market sounding. 'We just need to get approval from the cabinet committee on the structure, and we'll move ahead,' he said.
Arab News
7 days ago
- Business
- Arab News
Pakistan says Roosevelt Hotel's base valuation complete, will decide on transaction structure this month
ISLAMABAD: Pakistan has completed the baseline valuation of the Roosevelt Hotel in New York and is preparing to move forward with a transaction structure this month to privatize the state-owned property, the head of the Privatization Commission told Arab News this week. The Roosevelt, a 1,015-room historic hotel in Midtown Manhattan, has long been one of Pakistan's most prominent but politically sensitive overseas assets. Acquired by Pakistan International Airlines Investment Limited (PIAIL) in 1979, the hotel occupies a full city block on Madison Avenue and 45th Street. Over the past two decades, successive Pakistani governments have floated plans to sell, lease, or redevelop the property, but no proposal has advanced beyond early-stage planning. Operations at the Roosevelt were suspended in 2020 following steep financial losses during the COVID-19 pandemic. In 2023, Pakistan entered a short-term lease with the City of New York to use the property as a temporary shelter for asylum seekers, generating more than $220 million in projected rental income. That agreement ended in 2024 and no new revenue stream has since been announced. 'We have an idea of the asset valuation in Roosevelt,' Muhammad Ali, chairman of Pakistan's Privatization Commission, said in an interview when asked about the timeline to privatize the hotel. 'We have appointed JLL [Jones Lang LaSalle], who are one of the top consultants in the US market. They have done their homework. They have done the market sounding also. We just need to get approval from the Cabinet Committee [on Privatization] on the structure, and we'll move ahead.' He added: 'So this year, before June, I'm hoping that on the Roosevelt, we will have gone ahead with execution of the transaction as far as whatever structure is decided.' VALUATION AND TRANSACTION STRUCTURE The Roosevelt, whose liabilities and losses the privatization chief did not disclose, is one of several state assets the government hopes will contribute to its target of raising Rs86 billion ($306 million) in privatization proceeds during the fiscal year starting July 1, alongside the sale of national carrier Pakistan International Airlines and three electricity distribution companies. But how much money the hotel ultimately brings in, and its overall valuation, depended on the type of transaction structure adopted, Ali said. If the government opted for a straightforward 'as-is' sale and sold the property without securing any new permissions or approvals for zoning or development, the hotel would fetch the lowest price. However, if the government first obtained the necessary permits and approvals that a buyer would typically need for redevelopment, the property's value could double compared to the 'as-is' sale. Alternatively, if the government formed a joint venture with a private investor, sharing both the risks and future profits, the hotel could be worth four to five times more than its as-is valuation. 'So, depending on what sort of structure you have, how much risk you take, how much effort the government puts in, we can make a lot of money from this asset,' the privatization chief said. 'If we go with a joint venture structure, then this year we will only get the first advance payment, so that's a small amount of money which will be coming in [FY26].'
