Islamabad:
The government may send a delegation from the Privatization Commission to the United States to search for consultants to promote the transaction with the control of the Roosevelt hotel with high value, New York, in partnership with the private sector. The Privatization Commission has submitted a summary of Prime Minister Shehbaz Sharif’s approval of the advisor’s visit to the Prime Minister on privatization and secretary privatization from 20 to 24 to 24. According to sources. The government will spend approx. RS3 million on the two-person delegation visit to the United States.
It is unusual for a government team to travel abroad to attract financial advisers to privatization transactions. While road shows have been held in the past, they were primarily to cooperate with potential buyers of state units or assets, not to secure advisers. The government has already announced in local and foreign press seeking an expression of interest from new financial advisers by September 2 after the resignation of the former adviser due to a conflict of interest.
Pakistan had initially hired an American property management company to privatization of Roosevelt Hotel at a total cost of approx. RS2.2 billion. It had already paid $ 1.1 million to the company, which abandoned the transaction last month with reference to a “conflict of interest” and offered to return the payments. Jones Lang Lasalle (JLL) had been chosen to develop a transaction structure for the hotel’s privatization.
Roosevelt Hotel, located in the heart of a global commercial and tourist hub, is currently owned by the economically fighting Pakistan International Airlines (PIA). Pia owns the hotel through Pia-Investment Limited, which keeps its efforts through a subsidiary registered on the British Virgin Islands. Based on the work done by the former financial adviser, the government has already approved the transaction structure for Roosevelt Hotel, New York.
Of the three options evaluated by the financial advisor-direct sales, joint venture with several options and long-term lease-contract-joint venture model with several options approved. Last month, the government declared that the possibility of joint venture aims to maximize the long-term value for the country while ensuring flexibility, more exit options and minimizing future fiscal exposure.
Following Jll’s withdrawal, there may be doubts among potential financial advisers on Pakistan’s commitment to the transaction, said Muhammad Ali, adviser to the Prime Minister of privatization and explained the rationale behind the US visit. He said meetings with at least six potential financial advisers are already scheduled for August 21 to 22, and the visit is results -oriented. He added that there is a need to reassure potential advisers that most of the foundation has been completed and the government has completed the Joint Venture setting.
The government has arranged meetings with Citibank, Coldwell Banker Richard Ellis (CBRE) – a real estate provider – Savills, Gray Steel, Ankura and Cushman & Wakefield. Two of these companies had participated in the previous round of employment for the financial advisory role.
According to the financial advisory report on the transaction structure, Pakistan does not have to contribute additional funds to joint venture, as its share will be in the form of the hotel’s land value. “Based on pre-marketing, due diligence and analysis of the possibilities, Nets Joint Venture structure, the highest value for Pakistan’s government,” the counselor said in his report. The land value is calculated on the basis of its full potential, including the 32 -storey building. The development partner makes two initial deposits. “This option carries the highest risk, but also offers the highest net proceeds to Pakistan,” noted the adviser in the report presented last year.
ZTBL transaction
On Friday, the Privatization Commission signed the Financial Advisory Services Agreement on the privatization of Zarai Taraqiati Bank Limited (ZTBL). It has engaged a consortium led by Next Capital Limited. Other members of the consortium include Ijaz Ahmed & Associates, Baker Tilly Mehmood Idrees Qamar, Executives Network International, Bridge Public Relations, Savills Pakistan (PVT) Limited and Prima Global Consulting (PVT) Limited.
Post-private, ZTBL, with its nationwide network of 501 branches, will be better positioned to provide more accessible credit to small farmers and rural areas. It will also introduce modern banking technologies and digital solutions for agricultural financing according to the Privatization Commission.
However, there has been concern that, after ZTBL’s privatization, there may no longer be a financial institution that is fully dedicated to meeting the needs of small farmers. Most major banks do not meet small farmers, and there are doubts about their claims to grant loans to this sector. Sources also indicated that the central bank does not accurately reflect real loans to farmers, as loans to agro -based industries are also classified as agricultural loans.
Under the agreement, the financial adviser will implement a due diligence page, perform market sounds, engage in potential investors, structure the transaction, market it to investors and help the Privatization Commission to ensure a transparent bid process under the press release.
