Aviation Minister Ghulam Sarwar Khan Monday said the government had no intention to sell or dispose of the iconic Roosevelt hotel in New York.
He rejected all the news items circulating in certain quarters regarding the sale of Roosevelt hotel and termed it as speculation, a news release said.
“All reports circulating in the media are nothing more than speculation and political point-scoring,” he added.
However, the hotel ran into financial trouble after the onset of the Covid-19 pandemic, giving the lender a pretext to sell off its liabilities to another company. That firm has now set its sights on purchasing the hotel. It even attempted a takeover of the property, but the Pakistan government put its foot down and decided to take the matter into its own hands, Mr Sarwar said.
“The PIA management persuaded the government to intervene by paying off the loans at one go and get the asset secured for the nation.”
The government sought advice from the finance and aviation ministries. After receiving the advice, the government authorised the National Bank to take up this loan liability against the hotel and free it from any foreign influence or control.
“The Roosevelt Hotel is currently operational and has valid contracts till December this year with a number of airlines. Multiple options are being considered for its future and all decisions are made collectively by the hotel’s board and the Government of Pakistan,” the aviation minister said. He held out an assurance that no individual or business concern would be able to influence the government’s decision.
The Roosevelt hotel’s management had obtained a loan of $160 million from JP Morgan Bank, the payments of which were being made regularly by the hotel management from its own revenue stream.
By the year 2020, the accumulated loan amount payable reduced to $105 million, making regular and timely payments without any default.
Citing the overall situation of travel and hotel industry, the lender sold off its liabilities to another company which was interested in acquiring the Hotel for itself. It started calling back the loan during these times and attempting a take-over of the property. This was unacceptable to the PIA and government of Pakistan.
The PIA management, sensing the possible outcomes, convinced the government to intervene by paying off the loans in one-go and getting the asset secured for the country.
Deliberations were made in that regard and finally on the recommendations of the Ministry of Aviation and Ministry of Finance, the government authorized the National Bank of Pakistan to take up this loan liability against the hotel, freeing it from any foreign influence or control.
According to Ghulam Sarwar Khan, the main reason for its downfall was the sharp decline in the quality of infrastructure and rooms, which only worsened after the global COVID-19 Pandemic.