The privatization committee rejected media reports suggesting that the government has set a price of $ 100 million for the sale of the Roosevelt hotel in New York, calling for such misleading and inaccurate complaints.
In a statement published on Saturday, the Commission said that no base prices had been determined for ownership and that the evaluation will only be finalized at the time of the call for tenders.
“The reports circulating in the media concerning the assessment of the hotel are misleading. No price has been set for the Roosevelt hotel,” he said.
Learn more: The privatization of Roosevelt advances
Clarification also discussed the comments awarded to Muhammad Ali, advisor to the Prime Minister of Privatization, saying that he had been poorly cited.
“Ali simply referred to an initial partial payment, and not to the full selling price,” noted the commission.
The commission added that all the terms and conditions related to the privatization of the hotel would be finalized with the government’s approval. “The final terms of prices and transactions will be determined at the next meeting of the Cabinet Committee on privatization (CCOP),” said a spokesperson. An official agreement for the transaction should be signed during the current financial year, he added.
Earlier in March, the government asked the privatization committee to conduct the historically significant but underused Roosevelt hotel by a competitive tender process. However, he left the final decision on the advisability of pursuing an outright sale or opting for a joint venture or a rental model open to deliberation.
The board of directors of the Commission had recommended to explore privatization under a government agreement to government (G2G), keeping the three transaction structures – pure and simple sale, joint venture or 99 years – on the table for negotiations. However, the advice recommendation differs from the financial advisor’s proposal, which favored a joint venture model to maximize yields.
Also read: “Sell Roosevelt via Open Offer”
The financial advisor has offered three potential approaches: a complete sale of hotel land, a joint venture with a development partner or a 99 -year -old floor lease.
The advisor assessed the joint venture to offer the most potential gains while noting that a pure and simple sale, although the least risky, would produce the lowest product. The lease option would offer moderate to high yields over a longer period while allowing the government to keep land ownership.
The final structure of the Roosevelt hotel transaction must be decided by the CCOP on the basis of recommendations in the Ali Committee report. The Ali Committee was responsible for assessing the legal, financial, technical and geopolitical implications of various transaction structures in light of the evolution of dynamics in the United States.
The Commission also informed the Committee that no official offer had been received from a foreign government under a G2G agreement – highlighting the limited international interest in the hotel in the middle of the economic climate and current investment in Pakistan.
Learn more: American ends $ 220 million Hotel Roosevelt
In a new development, the New York government has published an early dismissal notice for its hotel lease in July – a full year before the expiration of the agreement. This unexpected decision could cost Pakistan, estimated at $ 80 million, lost cases. The hotel had been rented to the city at a rate of $ 210 per room during its third year.
The financial advisor’s report noted that even in an outright sales scenario, the complete realization of the product could take up to three years, because the buyer would be required to obtain all relevant permits and pay the balance after approval.
The 99 -year rental model would imply a longer -term payment structure, but could arouse more interest due to the lower lower financial commitment.
