By Staff Reporter
KARACHI: Citigroup Inc. is among seven international consortia competing to advise Pakistan on the privatization of New York’s Roosevelt Hotel, a move that signals Islamabad’s drive to unlock value from state-owned assets under a $7 billion International Monetary Fund program, a senior official said.
The century-old Manhattan property, owned by Pakistan International Airlines through its investment arm, ranks among Pakistan’s most valuable overseas assets. Situated near Grand Central Terminal, Times Square, and Fifth Avenue, the hotel has been closed since 2020 due to heavy losses, though it has occasionally served as a migrant shelter. The government is pursuing a joint venture model, avoiding an outright sale, to maximize long-term value through redevelopment.
“The technical bids of seven consortia have been opened on Sept. 16,” the official, who requested anonymity, said. “The legally successful bidder has to be announced within 30 days after the opening of the bids as per PPRA rules.”
Pakistan’s Public Procurement Regulatory Authority (PPRA) mandates a transparent, time-bound evaluation process for government contracts. The Privatization Commission, overseeing the deal, is expected to name a financial adviser by mid-October, with the privatization targeted for completion by year-end.
The consortia include prominent financial and legal firms, reflecting the deal’s significance. The official identified the bidders as Greysteel, B6 Real Estate Advisers, and Kirkland & Ellis LLP; CBRE, Morgan Stanley, Paul Hastings, and Goldman Harris LLC; Ankura, Bank of Punjab, Baker McKenzie, and Orr, Dignam & Co.; Savills, MACRO (a Savills Company), Cirtin Cooperman & Company LLP, Hogan Lovells, and Mohsin Tayebaly & Co.; Alvarez & Marsal Private Equity Performance Improvement Group LLC, Proskauer, and FGE Ebrahim Hosain; Citi Bank, Cushman & Wakefield, Proskauer Rose LLC, and HaiderMota & Co.; and Newmark, Herbert Smith Freehills Kramer (US) LLP, and Peregrinvest LLC. The participation of global heavyweights like Citigroup, Morgan Stanley, and Goldman Harris highlights the Roosevelt Hotel’s strategic value and Pakistan’s push to secure credible partners for its redevelopment.
The privatization is a key component of Pakistan’s plan to shed loss-making state enterprises and strengthen its $400 billion economy, strained by high debt and low foreign reserves. The IMF program, finalized in July last year, demands structural reforms, including divestitures, to stabilize finances and draw foreign investment.
Last month, Jones Lang LaSalle (JLL) withdrew as financial adviser due to a conflict of interest tied to client involvement, prompting Islamabad to expedite the selection of a new adviser. The urgency reflects IMF reform deadlines and domestic pressure to show progress on economic restructuring.
Economists see the privatization as a test of Pakistan’s reform commitment. A successful deal could boost investor confidence, signaling that the country is open for business and easing balance-of-payments pressures. A misstep, however, could erode trust in Islamabad’s fiscal discipline.
The hotel’s prime location and historical cachet make it appealing to developers, but its aging infrastructure demands significant investment. The joint venture model seeks to address these challenges by pairing Pakistan’s ownership with private capital and expertise. Opened in 1924, the 1,025-room Roosevelt Hotel has long symbolized Pakistan’s global presence but has faced financial struggles, worsened by the pandemic. Its 2020 closure followed years of losses. The government’s joint venture model, approved by the federal cabinet, aims to retain a stake in the asset while leveraging private-sector expertise.
The Privatization Commission will evaluate bids based on technical expertise, financial capacity, and redevelopment strategies. The selected consortium will shape the joint venture’s terms, including the choice of a redevelopment partner.
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