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Arab News
10-04-2025
- Business
- Arab News
Pakistan to seek fresh bids for national airline, says adviser
ISLAMABAD: The Pakistani government will seek fresh expressions of interest for the sale of Pakistan International Airlines later this month, a government adviser said on Thursday, two days after PIA reported its first annual profit in over two decades. Pakistan has been looking to offload a 51-100 percent stake in debt-ridden PIA, part of an effort to raise funds and reform cash-bleeding state-owned enterprises as envisaged under a $7 billion International Monetary Fund program. However, Islamabad's attempt to privatize PIA last year fell flat when it received only a single offer, well below the asking price of more than $300 million. Pakistan has offloaded almost all of the national carrier's legacy debt and shifted it to government books after bidders raised issues that had led to the failed attempt, according to the privatization ministry. 'In our last attempt to privatise PIA, pre-qualified bidders had some issues with taxation and the balance sheet. Those are taken care of now,' Muhammad Ali, government adviser on privatization, told Reuters. 'We plan to publish the new Expression of Interest (EoI) by the last week of April 2025,' he said. The government plans to complete the airline's privatization before the end of this year. 'We are also revising the pre-qualification criteria,' he said, adding that the reference price could also be revised keeping in view the latest accounts and changes in the balance sheet. Prime Minister Shehbaz Sharif last year announced plans to sell all SOEs. The adviser said that the process to privatise power distribution companies had also started, terming it a 'high priority transaction.' He said some companies previously due to be sold in the second phase were being pushed into the first phase. The adviser said the government had appointed Jones Lang LaSalle to advise on exploring different sales options for the PIA-owned Roosevelt hotel building in Manhattan, New York. They include selling the building as it is or opting for a joint venture with a top tier developer, which has the potential to generate proceeds five times higher, Ali said.
Zawya
10-04-2025
- Business
- Zawya
Pakistan to seek fresh bids for national airline, says adviser
The Pakistani government will seek fresh expressions of interest for the sale of Pakistan International Airlines later this month, a government adviser said on Thursday, two days after PIA reported its first annual profit in over two decades. Pakistan has been looking to offload a 51-100% stake in debt-ridden PIA, part of an effort to raise funds and reform cash-bleeding state-owned enterprises as envisaged under a $7 billion International Monetary Fund programme. However, Islamabad's attempt to privatise PIA last year fell flat when it received only a single offer, well below the asking price of more than $300 million. Pakistan has offloaded almost all of the national carrier's legacy debt and shifted it to government books after bidders raised issues that had led to the failed attempt, according to the privatisation ministry. "In our last attempt to privatise PIA, pre-qualified bidders had some issues with taxation and the balance sheet. Those are taken care of now," Muhammad Ali, government adviser on privatisation, told Reuters. "We plan to publish the new Expression of Interest (EoI) by the last week of April 2025," he said. The government plans to complete the airline's privatisation before the end of this year. "We are also revising the pre-qualification criteria," he said, adding that the reference price could also be revised keeping in view the latest accounts and changes in the balance sheet. Prime Minister Shehbaz Sharif last year announced plans to sell all SOEs. The adviser said that the process to privatise power distribution companies had also started, terming it a "high priority transaction". He said some companies previously due to be sold in the second phase were being pushed into the first phase. The adviser said the government had appointed Jones Lang LaSalle to advise on exploring different sales options for the PIA-owned Roosevelt hotel building in Manhattan, New York. They include selling the building as it is or opting for a joint venture with a top tier developer, which has the potential to generate proceeds five times higher, Ali said. (Reporting by Ariba Shahid; Writing by Asif Shahzad; Editing by Susan Fenton)
Express Tribune
10-03-2025
- Business
- Express Tribune
PIA sell-off set for July, IMF told
The government has assured the International Monetary Fund of selling the Pakistan International Airlines by July, but the future of Roosevelt Hotel in New York has yet to be undecided amidst the US decision to terminate the $228 million worth lease deal prematurely. In a briefing to the IMF over Pakistan's virtually stalled privatisation programme, the federal authorities said that they will try to privatise five to seven enterprises, including PIA, three financial institutions and three power distribution companies, according to the government sources. Among the financial institutions that will be privatised is the Zarai Taraqiati Bank Limited (ZTBL) and the government is hopeful to sell it off by November this year. The global lender has been told that the Cabinet Committee on Privatisation would make a decision whether to sell the priciest Roosevelt Hotel or give it under a joint lease agreement. The hotel, owned by PIA, is located in an area considered among the top 1% of the most expensive properties in the world. The hotel has 1,025 rooms and Pakistan had given it on a three years' lease to the Immigrant Housing Business by the New York City Government in July 2023. But the IMF was informed that the New York City government had given a notice to end the deal with effect from July – one year before its expiry. This would cause around $80 million loss of business. The city government had taken the hotel at $210 per room for the third year. In November last year, the CCOP had apprehended that President Donald Trump's anti-immigration policies could impact the $228 million three-year deal. The IMF was informed that the authorities were looking for alternate business options. However, despite hiring one after another financial advisor, the government has not yet been able to take a clear decision on the privatisation of the Roosevelt Hotel. Pakistan hired Jones Lang LaSalle Americas as the financial advisor for the Roosevelt privatisation transaction at a cost of Rs2.1 billion. The advisor's fee includes milestone-based payments and a success fee of 0.95% of the sale proceeds. The IMF was told that the CCOP would soon take a decision on the mode of privatisation of the hotel, based on input by a committee headed by Ali Pervaiz Malik, now federal minister for petroleum. The committee has recommended privatising the valuable Roosevelt Hotel in New York through open bidding after Saudi Arabia failed to show formal interest in acquiring the PIA-owned property. But the CCOP has not yet taken up the committee report for a decision. The Privatisation Commission said last year that under a government-to-government arrangement, a foreign government must formally declare its interest before invoking the Inter-Governmental Commercial Transaction Act. As of late December, no foreign government had shown formal interest to acquire the hotel, according to the committee's proceedings. The special committee has proposed to the CCOP that the hotel be sold via open and competitive bidding. However, the committee also left it to the Privatisation Commission to decide whether to outright sell the hotel, develop it as a joint venture, or lease it for 99 years. PIA Privatisation The Privatisation Ministry also briefed the IMF about the status of the PIA privatisation and gave a July 2025 deadline to sell the loss-making entity, said the sources. The government's earlier attempt to privatise PIA had badly failed after its weak scrutiny process ended up at selecting a real estate developer as the sole bidder. The sole bidder had given Rs10 billion offer, which was many times lower than the minimum ask price of Rs85 billion. The sources said that the IMF was informed that the government was in the process of gauging the market sentiment before issuing the Expression of Interest for inviting the investors by the end of this month. It seems the government is not very confident about the success of the second attempt as it has again started the process of checking the investors' confidence and whether there is any appetite for buying a bleeding asset. The authorities informed the IMF that three parties may take part in the bidding. These include two bidders who had earlier withdrawn from the process after the government did not accept the condition to waive off 18% sales tax on lease of the aircraft and taking out Rs45 billion liabilities from the PIA balance sheet before its privatisation. The IMF has already agreed to relax these two conditions, which along with opening of European routes are considered as major incentives for the success of the second bid on the privatisation. Bleeding Power sector The IMF has been informed that the government wanted to sell three power distribution companies Faisalabad, Islamabad and Gujranwala by December this year. However, the decision whether to sell all these entities in one go or take each enterprise separately in the market will be taken in the advice of the financial advisor. The IMF inquired whether there was any commercial debt owed by these three power distribution companies. The government does not have a plan to sell any power generation company this year, the IMF was told. Financial Institutions The sources said that the government has also informed the IMF that the United Arab Emirates was interested in buying the First Women Bank Limited as a full commercial bank and the deal is expected by the end of May. However, the UAE wants to acquire the bank under the government-to-government deal instead of participating in the open bidding. The sources said that the government was also in the process to hire a financial adviser for the sale of the ZTBL. The government is hoping to sell the bank by November this year, said the sources. The authorities also expect to sell the House Building Finance Company next month yet another deadline after earlier multiple deadlines lapsed.
Express Tribune
26-02-2025
- Business
- Express Tribune
US terminates $220m Roosevelt Hotel deal
New York City is ending its $220 million lease agreement with the PIA-owned Roosevelt Hotel following intense criticism from some of US President Donald Trump's supporters over the use of American taxpayer money to house asylum seekers. The iconic hotel in Manhattan was shut down in 2020 due to a severe loss of revenue resulting from the coronavirus pandemic. Three years later, its management signed a lease contract with the New York City which converted it into a shelter for a large number of asylum seekers in the United States. Facing pressure from both the federal government and right-wing hardliners, Mayor Eric Adams announced the closure of the facility on Monday. The hotel reportedly housed tens of thousands of migrants across its 1,025 rooms at an estimated cost of $200 per night. The city now sees a sharp decline in weekly migrant arrivals, dropping from 4,000 at the peak of the crisis in 2023 to around 350 now. The Roosevelt Hotel served as a key processing center, handling around 75% of the migrants who arrived in the city. Mayor Adams credited the closure to the administration's successful emergency response and policy decisions, stating that it will help the city save millions of taxpayer dollars. Earlier this month, Elon Musk tweeted on his owned X platform that his Department of Government Efficiency (DOGE) team uncovered FEMA's illegal $59 million spending to allegedly house illegal immigrants in New York City luxury hotels. Musk's post detailed how FEMA's actions violated an executive order from President Donald Trump, which restricts FEMA funds to disaster relief efforts. Musk's team discovered that the $59 million meant for disaster aid was instead used to accommodate illegal migrants in high-end New York City hotels. He further announced that a demand would be made to recoup those funds. The Roosevelt Hotel, a well-known landmark in New York City, opened its doors in 1924 and has since become a symbol of the city's architectural grandeur. Located at 45 East 45th Street in Midtown Manhattan, the 19-story building was designed in the Italian Renaissance Revival style by George B. Post & Son. Named after US President Theodore Roosevelt, the hotel has long been a fixture of New York's skyline. Historically, the Roosevelt has offered various high-end amenities, including a pet kennel, childcare services, and even an in-house doctor. With over 1,200 rooms, the hotel remains a significant part of New York's hotel scene. In 2000, it was fully acquired by PIA, the national airline of Pakistan, which now owns the property.
