Islamabad:
The government can send a delegation from the Privatization Commission to the United States to search for consultants to advance the management of the management of the Roosevelt of high value, New York, in partnership with the private sector. The privatization committee submitted a summary of the approval of Prime Minister Shehbaz Sharif for the adviser’s visit to the Prime Minister on the privatization and privatization of the secretary from August 20 to 24, according to sources. The government will spend around 3 million rupees on the delegation to the delegation to two people in the United States.
It is unusual for a government team to travel abroad to attract financial advisers for privatization transactions. Although the roadshows took place in the past, they were mainly to engage with potential buyers of government entities or assets, not to obtain advisers. The government has already announced in the local and foreign press, seeking expressions of interest of new financial advisers by September 2, following the resignation of the previous adviser due to a conflict of interest.
Pakistan had initially hired an American real estate management company for the privatization of the Roosevelt hotel at a total cost of around 2.2 billion rupees. He had already paid $ 1.1 million to the company, which abandoned the transaction last month, citing a “conflict of interest” and proposed to return the payments. Jones Lang Lasalle (JLL) had been selected to develop a transaction structure for the privatization of the hotel.
The Roosevelt Hotel, located in the heart of a world shopping center and tourism, is currently belonging to Pakistan International Airlines (PIA) in financial difficulty. PIA has the hotel via PIA-Investment Limited, which has its challenges via a subsidiary recorded in the British Virgin Islands. Based on the work carried out by the previous financial advisor, the government has already approved the structure of transactions of the Roosevelt hotel, New York.
Of the three options evaluated by the financial advisor – outright sale, joint venture with several long -term options and lease – the joint venture model with several options has been approved. Last month, the government said that the joint venture option aims to maximize the country’s long -term value while guaranteeing flexibility, in several exit opportunities and minimizing the future budgetary exhibition.
After the withdrawal of JLL, there may be doubts among the potential of financial advisers on Pakistan’s commitment to the transaction, said Muhammad Ali, Prime Minister’s advisor to privatization, explaining the justification of the American visit. He said meetings with at least six potential financial advisers were already scheduled for August 21 to 22 and that the visit is focused on the results. He added that it is necessary to reassure the potential advisers that most of the bases have been completed and that the government has finalized the joint venture option.
The government has organized meetings with Citibank, the Banker Coldwell Richard Ellis (CBRE) – A real estate service provider – Savills, Gray Steel, Ankura and Cushman & Wakefield. Two of these companies had participated in the previous job series for the role of financial advisor.
According to the report of the financial advisor on the structure of transactions, Pakistan will not need to contribute additional funds for the joint venture, because its share will take the form of the value of the hotel. “Based on pre-marketing, reasonable diligence and options’ analysis, the joint venture structure achieves the greatest value for the Government of Pakistan,” said the advisor in his report. The value of the land will be calculated according to its full potential, including the 32 -storey building. The development partner will make two initial deposits. “This option has the highest risks but also offers the highest net product in Pakistan,” noted the advisor in the report submitted last year.
ZTBL transaction
Friday, the privatization committee signed the financial consulting services agreement for the privatization of Zarai Taraqiati Bank Limited (ZTBL). He hired a consortium led by Next Capital Limited. The other members of the consortium include Ijaz Ahmed & Associates, Baker Tilly Mehmood Idrees Qamar, Managers of the International Network, Bridge Public Relations, Savills Pakistan (PVT) Limited and Prima Global Consulting (PVT) Limited.
Post-privatization, ZTBL, with its national network of 501 branches, will be better positioned to offer a more accessible credit to small farmers and rural communities. It will also introduce modern banking technologies and digital solutions for agricultural financing, according to the privatization committee.
However, concerns were raised only after the privatization of ZTBL, there may no longer be a financial institution entirely dedicated to meeting the needs of small farmers. Most large banks are not intended for small farmers, and there are doubts about their claims to grant loans to this sector. Sources have also indicated that the central bank does not precisely reflect real loans to farmers, because loans to agro-basée industries are also classified as agricultural loans.
Under the agreement, the financial advisor will produce a reasonable diligence for sale, will carry out market surveys, will engage with potential investors, structure the transaction, market it for investors and help the privatization commission to ensure a transparent tender process, in accordance with the press state.
