The privatization commission has dismissed the reports of the media that suggest that the government has set a price of $ 100 million for the sale of the Roosevelt hotel in New York, calling such deceptive and inaccurate claims.
In a statement issued on Saturday, the Commission clarified that no base price for property has been determined and that the valuation will only be ended at the time of the tender.
“The reports that circulate in the media with respect to the valuation of the hotel are misleading. No price has been set for the Roosevelt hotel,” he said.
Read more: Roosevelt privatization advances ahead
The clarification also addressed the comments attributed to Muhammad Ali, advisor to the Privatization Prime Minister, saying that he had been mistakenly summoned.
“Ali simply referred to an initial partial payment, not to the total sale price,” said the commission.
The commission added that all the terms and conditions related to the privatization of the hotel would end with the approval of the Government. “The final prices and transactions terms will be determined at the next meeting of the Cabinet Committee on Privatization (CCOP),” said a spokesman. A formal agreement for the transaction is expected to be signed within the current fiscal year, he added.
At the beginning of March, the Government instructed the privatization commission to proceed with the privatization of the Hotel Roosevelt historically significant but underutilized through a competitive bidding process. However, he left the final decision on whether to follow a direct sale or opt for a joint company or a lease model open to greater deliberation.
The Board of the Commission had recommended exploring privatization under a government to government (G2G), maintaining the three transaction structures: direct sale, joint venture or a lease of 99 years, on the table for negotiations. However, the recommendation of the Board differed from the financial advisor’s proposal, which favored a joint business model to maximize yields.
Read too: ‘Sell Roosevelt through open offers’
The financial advisor presented three potential approaches: a complete sale of the hotel land, a joint company with a development partner or a 99 -year -old land lease.
The advisor evaluated the joint company that offered the highest potential profits while indicating that a direct sale, although less risky, would produce the lowest income. The lease option would deliver moderate to high yields for a longer period while allowing the Government to retain land ownership.
The final structure of the Roosevelt hotel transaction must be decided by the CCOP based on recommendations in the Ali Committee report. The Ali Committee had the task of evaluating the legal, financial, technical and geopolitical implications of various transactions structures to the light of changing dynamics in the United States.
The Commission also informed the committee that no formal offers from any foreign government under a G2G agreement had been received, highlighting the limited international interest in the hotel in the middle of the current economic and investment climate of Pakistan.
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In an additional development, the New York City Government has issued an early termination notice for its lease of the hotel, as of July, a full year before the expiration of the agreement. This unexpected movement could cost Pakistan approximately $ 80 million in lost businesses. The hotel had been leased to the city at a rate of $ 210 per room during its third year.
The financial advisor’s report said that even under an absolute sales scenario, the complete realization of the income could take up to three years, since the buyer should obtain all the relevant permits and pay the balance after approval.
The 99 -year -old lease model would imply a long -term payment structure, but may attract more interest due to lower financial commitment in advance.
