Joint venture proposed as best transaction structure for PIA’s Roosevelt Hotel

ISLAMABAD: The board of the Privatisation Commission recommended a joint venture as the most suitable transaction structure for the Roosevelt Hotel, owned by Pakistan International Airlines (PIA) in New York, during its meeting on Wednesday.
The recommendation is in line with the Transaction Structure Report submitted by the financial adviser for the transaction, Jones Lang LaSalle Americas, Inc. (JLL), to the Privatisation Commission.
The consortium of Jones Lang LaSalle Americas, Inc. was appointed as the Financial Advisory Consortium (FAC) for the Roosevelt Hotel transaction in November last year, with the Financial Services Agreement (FASA) being signed in February this year.
As part of its deliverables, the FAC was tasked with submitting a Transaction Structure Report, suggesting alternative transaction structure options for the mixed-use development of the Roosevelt Hotel. The report considered and evaluated options, including outright sale, joint venture development, and long-term lease.
Based on its analysis and experience in the New York real estate market, JLL recommended the joint venture as the most suitable transaction structure to maximise the expected proceeds and value for the government of Pakistan.
Minister for Privatisation Abdul Aleem Khan, who chaired the board meeting, commended JLL for compiling a comprehensive transaction structure report and hoped that the government would secure the best deal for the Roosevelt Hotel transaction.
A Privatisation Commission press release issued after the meeting detailed several significant decisions concerning the ongoing privatisation process of various government institutions.
The board unanimously approved financial and technical aspects, including the appointment of financial advisers for PIA, Discos, and the Roosevelt Hotel, among others.
The board also approved the selection of six firms as prequalified financial advisers for the privatisation programme. These firms include Citigroup Global Markets Ltd of the UK, J.P. Morgan, Alvarez and Marsal of UAE, EY Consulting LLC of Dubai, PWC-A.F. Ferguson and Company, and BDO Ebrahim and Company Pakistan. This prequalification will enable the Privatisation Commission to engage financial advisers promptly for upcoming transactions.
Minister Aleem Khan expressed his satisfaction with the performance of the Privatisation Commission Board, noting that the inclusion of “world-class” financial advisers is a positive step forward.
He emphasised the need to relieve the national exchequer from the burden of loss-making institutions through privatisation, stressing the importance of transparency in this sector.
“We have to make better, solid and lasting decisions in the wider national interest,” he said, adding that any institution that meets the criteria and follows the rules and regulations must be given a chance to take part in the privatisation process.
Published in Dawn, August 22nd, 2024