Islamabad [Pakistan]Aug 16 (ANI): The Pakistani government has decided to offer Qatar a 51% stake in the Roosevelt Hotel, New York, and Pakistan International Airlines (PIA), media have reported citing sources.
Prior to his visit to Qatar, Pakistani Prime Minister Shehbaz Sharif in a meeting postponed a plan to sell two LNG power plants in Doha, with some participants during the discussion believing that Qatar might not not get the best net price of the Rs 104 billion of debt that these plants owe.
However, according to sources at Pakistani outlet The Express Tribune, although the deal with Qatar to sell power plants is on hold, majority stakes in state-owned airlines will be sold to Qatar.
This all happened during a meeting to prepare for Prime Minister Shairf’s visit next week to Qatar, which is tentatively scheduled for August 22-23.
Some members present at the meeting said that Qatar may not be able to recover the debt from these plants and that it should be withdrawn or converted into long-term financing. After excluding liabilities, the government could get $500 million to $600 million at best, which was politically difficult to sell to the people as the best price, they added.
The National Power Parks Management Company Limited (NPPMCL) owns 1,230 megawatts (MW) Haveli Bahadur Shah and 1,223 MW Balloki. These power plants were set up with public funding instead of the 70:30 debt ratio.
The Ministry of Finance had purchased the capital of these power plants a few years ago with proceeds from the Pakistan Development Fund.
Government debt of 103.7 billion rupees is to be replaced with bank loans, which will significantly reduce the final price, the sources say. The cost of 70% of the projects must be converted into long-term financing for the privatization of the plants in accordance with the capital structure based on the tariffs.
A senior government official said finding LNG plant prices was not immediately possible; therefore, these plants may not be offered to the Qatari government for investment. Finance Minister Miftah Ismail and former Prime Minister Shahid Khaqan Abbasi also attended the meeting.
The sources said it was decided that Pakistan should offer Qatar 10% stake in government-owned listed companies, in line with the similar offer it made in the United Arab Emirates.
It was also decided on Monday that Pakistan would offer a 51% stake in The Roosevelt Hotel, New York, and the PIA and management control to Qatar. But the PIA law prohibits selling more than 49% of the shares and giving management control to any other party.
It was decided to immediately initiate legal proceedings to amend the PIA law to remove the restrictive clause.
The Roosevelt Hotel is owned by the PIA through a PIA-Investment Limited. PIA-IL holds its interests through a subsidiary registered in the British Virgin Islands. The hotel, located in a very expensive location, was closed in December 2020. (ANI)