PIA to generate $30m for Roosevelt Hotel New York
Aftab Ahmed
Islamabad: The PTI government has approved immediate cash support of US$30 million for Roosevelt Hotel New York through market financing with the government of Pakistan guarantee.
Sources told Newztodays.com that Aviation Division had tabled a summary before the economic coordination committee to approve immediate cash support of US$130.3 million.
This amount also included US$ 100 million for operational requirements and US$ 30.3 million for Roosevelt Hotel as carrying over cost equivalent to Pak Currency through marketing financing with the government of Pakistan guarantee.
PIAC will be obligated for the debt servicing of the finance facility including interest payments.
It will also recover US$30.3 million from PIA-IL including the cost of the borrowing.
Read More:US firm drags Roosevelt Hotel into debt trap
Aviation Division had further requested to extend the existing guarantee from Rs 226 billion to Rs 247.630 billion.
During the discussion, the aviation division said that Finance Division had raised no observations.
Roosevelt Hotel New York For Sale
Every government has been making a struggle to sell Roosevelt Hotel in New York. According to reports, former US President Trump had also expressed interest to buy it. PTI government had also planned to sell this hotel.
However, due to resistance from different quarters, it had mulled over different options to lease it or run through joint ventures.
Roosevelt Hotel Owner
Roosevelt Hotel New York is a strategic asset and PIA is its owner. This is located in New York.
The government had also listed it on sick units the Pakistan government had owned. The hotel is to pay over around $100 million debt now.
Read More: Roosevelt hotel PIA: Rs 275m approved for legal battle
This is why the government of Pakistan Tehreek-e-Insaf–PTI believes that it should be leased out or operate on a joint venture basis to turn this loss-making hotel asset into profit-making. Being under debt, Aviation Division is pushing the government for the early disposal of this hotel.
The government has also ruled out selling off the hotel, saying that this hotel was running at a loss. It said the losses swelled to around $100 million. Keeping in view this, the government was working on different options to turn around this loss-making asset.
A joint venture was one of the options that the government was following to turn this loss making asset into profit making.
Earlier, the cabinet committee on privatization had called a special meeting for the early disposal of the New York Roosevelt Hotel owned by Pakistan International Airlines-Investment Limited (PIA-IL).
Aviation Division had raised the early removal of Roosevelt Hotel before Prime Minister Imran Khan on several occasions.
In the meeting chaired by the Prime Minister on the Restructuring of PIACL held on June 8, 2020, it was directed that Aviation Division shall submit present its proposal for JV / long term lease of Roosevelt Hotel before the CCoP for its consideration within one week.
In another meeting held on June 19, 2020, the prime minister directed that as part of the PIA financial restructuring plan, Aviation Division, in consultation with Privatization Division, shall submit and present its proposal for revision of the constitution of Taskforce for Privatization of Roosevelt Hotel.
Read More: ECC okays timely settlement of Roosevelt Hotel’s debt
Privatization of Roosevelt Hotel Manhattan, New York – Asset owned by Pakistan International Airlines-Investment Limited (PIA-IL).
Read More:ECC Okays $ 17.3m to clear Roosevelt Hotel liabilities
On a summary moved by the Ministry of Privatization on November 14, 2019, titled “Request for the privatization of PIA-Investment Limited (PIA-IL) Owned Assets,” the Cabinet Committee of Privatization constituted a Task Force in November 2019 under the Chairmanship of Minister for Privatization, comprising of SAPM on Overseas Pakistanis Secretary Aviation, Secretary Privatization, Secretary Finance, CEO PIACL, and Legal & Financial Consultants of Roosevelt Hotel for framing Terms of Reference (ToRs) for leasing Roosevelt’s site for setting up a Joint Venture Project.
Aviation Division had pointed out during the meeting of CCoP that no one had consulted it in the matter. The Federal Cabinet in December 2019 ratified this decision of the CCoP with the direction to include MD, PIA-L in the Task Force.
Read More:Govt considers direct take over Roosevelt Hotel
Task Force had held few meetings in the Ministry of Privatization in December 2019. Subsequently, the Ministry of Privatization forwarded a draft summary for CCoP to Aviation Division on 18th December 2019.
Roosevelt Hotel History
The Roosevelt Hotel has a long history and located at 45 East 45th Street. This is between Mansion Avenue and Vanderbilt Avenue in Midtown Manhattan New York City.
The hotel has been named in the honor of President Theodore Roosevelt and opened on September 22, 1924.
This hotel has 1025 rooms that included 52 Suites, 3900 square foot Presidential Suite with four-bed rooms, a kitchen.
Presidential Suite has formal living, diving areas, and a wrap-around terrace. Pen Central owned it in 1978 and put it up for sale.
Milstein leased Roosevelt Hotel to Pakistan International Airlines (PIA) through its investment company-PIA Investment Ltd (PIA).
It leased with an option to purchase at a price of $36.5 million. Prince Faisal Bin Khalid Bin Abdulaziz Al Saudi was also part of the investors in this deal in 1979.
In 1999, PIA used its option to buy this hotel.
Later in 2005, PIA also bought shares of Saudi Partner that also included stakes in the Hotel Scribe in Paris at US$40 million.
Pakistan had announced in 2007 to put this hotel on sale.
The Roosevelt Hotel New York has announced to close permanently on October 31, 2020.
The Roosevelt Hotel had announced to close the hotel permanently as of October 31, 2020.
In a tweet, it had announced a decision to close this hotel.
It further said that ” We at The Roosevelt Hotel have enjoyed being a part of your stories, and an integral part of the history of Midtown Manhattan since 1924.
But after almost 100 years of welcoming guests, the hotel will be closed.
For those guests with future reservations, we are working on communicating alternative accommodations.
We truly love each and every one of you. And may your passion for our Great City continue…as Teddy would have wanted, it said.
