Pakistan has decided to sell a minority stake in Roosevelt Hotel in Manhattan and is looking for a valuation of at least $1 billion for one of New York City’s iconic properties.
Islamabad acquired the hotel in 2000, which is considered one of its prized overseas national assets.
As part of its $7 billion IMF-backed privatization drive, the Cabinet Committee on Privatization approved the transaction structure for the Roosevelt Hotel.
The decision has been taken in step with proposal made by the South Asian country’s Privatization Commission Board, officials said.
The government was presented with three options to pick on the hotel situated in a prime location — an outright sale, a joint venture with multiple options, and a long-term lease.
After deliberations, the Government body approved the Joint Venture model.
Reuters news service reported that Islamabad aims at $1 billion evaluation of the grand structure.
The Government aims at receiving $100 million by next year.
The Roosevelt Hotel, which was at the time of its inception in the 20th century a fabled meeting point for artists, diplomats and politicians, was shuttered in 2020 amid deep financial losses during the Covid-19 pandemic.
Afterwards, it was briefly leased to the City of New York in 2023 to accommodate asylum seekers in a $220 million deal, which expired in 2024.
Since last year, no additional revenues have been generated.
Officials hope the joint venture model of ownership will lead to long-term value for the country. It also promises flexibility, multiple exit opportunities with minimal fiscal exposure prospects.
Pakistan will maintain an ownership interest through an equity partnership but declined to specify the size of the stake that could be offered to a prospective joint venture partner.
The Ministry of Privatization announced Tuesday that Pakistan has prequalified four investors for the sale of Pakistan International Airlines (PIA), while its Cabinet Committee on Privatization (CCOP) has approved the transaction structure for the denationalization of the Roosevelt Hotel in New York under a joint venture.
Also, Pakistan has been seeking to sell a 51-100 percent stake in the struggling national airline PIA to raise funds and reform cash-draining in the state-owned enterprises.
The sale of PIA stake will mark the country’s first major privatization in nearly two decades.
The bidding groups include industrial firms Lucky Cement, Hub Power Holdings, Kohat Cement and Metro Ventures.
Other bidders include investment firm Arif Habib Corp. and include fertilizer producer Fatima Fertilizer, private education operator The City School, and real estate firm Lake City Holdings. Additionally, Fauji Fertilizer Company, a military-backed conglomerate, and Pakistani airline Airblue.
“The prequalified parties will now proceed to the buy-side due diligence phase — a critical next step in the transparent and competitive privatization process of PIACL,” the privatization commission’s statement said
PIA, once a respected carrier in Asia, has been running on taxpayers’ money for decades due to political interference, corruption and inefficiencies. The airline’s privatization has repeatedly collapsed amid union resistance, legal hurdles and low investor appetite.
In all, Pakistani state-owned enterprises posted annual losses of more than $2.87 billion.
If subsidies, grants and other support are also taken into account, the losses go beyond $3.59 billion, Finance Minister Muhammad Aurangzeb told the Parliament in a budget speech last month.
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