The privatization of Pakistan’s Roosevelt Hotel in New York has suffered a major blow after the global real estate firm acting as financial adviser (FA) stepped down.
The decision is expected to cause significant financial losses and delay the transaction by at least 18 months.
The delay could cost the national exchequer over $50 million in debt servicing and maintenance expenses, as the hotel continues to remain underutilized.
The Roosevelt Hotel, owned by Pakistan International Airlines (PIA), took a $142 million loan from a financial institution in 2020.
Until a new FA is hired and the due diligence process is completed, the financial burden of debt servicing will persist. The Privatization Commission is yet to initiate a new hiring process for the FA.
Former caretaker minister for privatization, Fawad Hassan Fawad, stated that the Roosevelt Hotel remains a prime real estate asset in New York and any sale must be handled with professionalism and transparency. He added that a development plan for constructing a 1.6 million square foot area on the site had previously been considered.
