Posted Jul 23, 2020, 12:46 PM
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https://tribune.com.pk/story/2256251...y-stakeholders
Decision on Roosevelt Hotel put off due to backpedalling by stakeholders
PC board gives nod to transaction structures
Shahbaz Rana
July 23, 2020
Quote:
The Privatisation Commission (PC) board on Wednesday approved transaction structures for five government entities but put off decision on the fate of Roosevelt Hotel due to backpedalling by stakeholders.
The PC board approved four transaction structures for the privatisation of House Building Finance Corporation (HBFC), First Women Bank Limited, Jinnah Convention Centre and Services Hotel Lahore. Headed by Privatisation Minister Mohammad Mian Soomro, the board also approved the divesting of 20% shares in the profitable Pakistan Reinsurance Company Limited.
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Quote:
The transaction structures will now be placed before the Cabinet Committee on Privatisation (CCOP) and subsequently before the federal cabinet for endorsement, according to a statement of the planning ministry. The board put off decision on divesting shares in blue-chip firms like Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and Mari Petroleum Limited. The board will meet next week again to discuss these transactions.
The meeting agenda showed that the Pakistan Tehreek-e-Insaf government did not have an immediate plan to get rid of loss-making power sector and other such entities.
At present, the Ministry of Privatisation is processing the divestment of 18 public sector enterprises (PSEs) but heavy loss-making entities are not part of the list. The board discussed the privatisation of Roosevelt Hotel, New York - an entity owned by Pakistan International Airlines Investment Limited (PIAIL) that was profitable till 2019.
The board was informed that PIAIL refused to upgrade the valuation study despite a decision by the CCOP on July 2, sources told The Express Tribune. PIAIL in July last year had engaged the services of Deloitte Transactions and Business Analytics LLP to conduct the feasibility study. Deloitte in its draft report dated July 18, 2019, after analysing multiple options, recommended that “the highest and best use of Roosevelt Hotel is to redevelop the site into a mixed use of primarily office tower over retail and condominium”.
Sources said PIAIL decision suggested that it did not want to complete the transaction at this stage, which was what experts and political parties were suggesting due to a slump in the realty market.
The CCOP had also directed the Privatisation Commission to engage a financial adviser to convert the hotel property as a joint venture project. However, the Commission has shown its inability to hire the financial adviser due to high cost of engaging companies that are considered the best in Manhattan New York real estate. It has decided to request the Ministry of Finance to bear the cost of financial adviser that may runs into millions of dollars.
In November last year, the CCOP had set up a cabinet task force for privatisation of the hotel but it had to de-notify the taskforce as it was in violation of the Privatisation Ordinance 2000.
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