Privatization Commission recommends one-transaction structure for PIA's Roosevelt Hotel
The Privatization Commission has
recommended a one-transaction sale structure for the Roosevelt Hotel in New
York City, as revealed by a top official during a meeting with the Senate
Standing Committee on Privatization.
Privatization Secretary Usman Akhtar
Bajwa shared details of the commission’s plan and also confirmed the formation
of a new committee tasked with engaging investors for the upcoming privatization
of Pakistan International Airlines (PIA).
As part of the strategy for PIA’s privatization,
the commission has suggested tightening the pre-qualification criteria to
exclude non-operational bidders, such as Blue World City, who had previously
submitted a bid during last year’s failed attempt. That attempt garnered only
one bid, far below the asking price of over $300 million.
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In addition to the efforts
surrounding PIA, the federal government has enlisted Jones Lang LaSalle (JLL)
to advise on the sale of PIA’s Roosevelt Hotel.
The government is now preparing to
issue fresh expressions of interest for the sale of PIA by the end of April,
according to Muhammad Ali, the Prime Minister’s adviser on privatization. Ali
mentioned that challenges related to taxation and the airline’s balance sheet,
which previously concerned potential bidders, have been addressed, and the
bidding criteria have been updated accordingly.
The privatization is now expected to
be completed by the end of 2025, with the sale involving anywhere from 51% to
100% of PIA’s shares, along with management control. The announcement of PIA’s
first annual profit in two decades is anticipated to attract more investor
interest.
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The privatization process will be
carried out in three phases, with the first phase – including PIA, the
Roosevelt Hotel, and Zarai Tarqiati Bank (ZTB) – set to conclude within the
next year. The subsequent phases will take three and five years, respectively,
though the list of entities for sale may be expanded following further
discussions by the Cabinet Committee on State-Owned Enterprises (SOEs), which
is led by the finance minister.
During the meeting, concerns were
raised about including the Pakistan Minerals Development Corporation (PMDC) in
the privatization list. Senator Umer Farooq suggested that the corporation
could be made profitable and should not be privatized. However, Bajwa clarified
that while the petroleum division had recommended PMDC’s privatization, the
matter is still under review by the Cabinet Committee on SOEs.
Source: Profit Pakistan