Pakistan Qualifies Four Investors for PIA Sale, Approves Roosevelt Hotel Joint Venture Deal
Pakistan has taken significant steps towards privatizing its assets by prequalifying four investors for the sale of Pakistan International Airlines (PIA) and approving the transaction structure for the denationalization of the Roosevelt Hotel in New York under a joint venture.
Prequalified Investors
Among the bidding groups, one is a consortium of major industrial firms including Lucky Cement, Hub Power Holdings, Kohat Cement, and Metro Ventures. Another group is led by investment firm Arif Habib Corp and includes Fatima Fertilizer, The City School, and Lake City Holdings. Additionally, Fauji Fertilizer Company and Airblue, a Pakistani airline, have also been approved to bid for PIA.
The prequalified parties will now proceed to the buy-side due diligence phase, a critical step in the transparent and competitive privatization process of PIACL.
Roosevelt Hotel Joint Venture
The Cabinet Committee on Privatization (CCOP) has approved the transaction structure for the Roosevelt Hotel under a “Joint Venture model with multiple options. ” This approach aims to maximize long-term value for the country while providing flexibility, multiple exit opportunities, and minimizing future fiscal exposure.
The Roosevelt Hotel, a 1,015-room historic property in Midtown Manhattan, has been a prominent but politically sensitive asset for Pakistan since its acquisition by Pakistan International Airlines Investment Limited (PIAIL) in 1979. However, successive governments have struggled to find a viable solution for the property, with plans for sale, lease, or redevelopment failing to progress beyond initial stages.
Due to financial losses during the COVID-19 pandemic, operations at the Roosevelt were suspended in 2020. In 2023, Pakistan entered a short-term lease with the City of New York to use the property as a temporary shelter for asylum seekers, generating an estimated $220 million in rental income. However, this agreement ended in 2024, and no new revenue stream has been announced since.
Raising Privatization Proceeds
The Roosevelt Hotel is one of several state assets that the government hopes will contribute to its target of raising Rs86 billion ($306 million) in privatization proceeds during the fiscal year starting July 1. Alongside the sale of PIA and three electricity distribution companies, the government is taking significant steps towards privatizing its assets to boost the economy.