Islamabad [Pakistan], August 16 (ANI): Pakistani government has decided to offer Qatar with a 51 per cent stakes in the Roosevelt Hotel, New York, and the Pakistan International Airlines (PIA), media reports said citing sources.
Ahead of his Qatar visit, Pakistan Prime Minister Shehbaz Sharif in a meeting put off a plan to sell two LNG-fired power plants to Doha as some participants during the discussion were of the view that Qatar may not fetch the best price net of the Rs 104 billion debt that these power plants owe.
However, as per Pakistani media outlet The Express Tribune's sources though the Qatar deal to sell power plants is shelved yet majority stakes in state-run airlines will be sold to Qatar.
All this transpired at a meeting to make preparations for Prime Minister Shairf's visit next week to Qatar, which is tentatively planned for August 22 to 23.
Some members at the meeting said that Qatar might not be able to fetch debt these power plants owe and needed to be retired or converted into long-term financing. After excluding the liabilities, the government might get USD 500 million to USD 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 power plants. These power plants were set up with government funding instead of the 70:30 debt-to-equity ratio.
The Ministry of Finance had bought the equity of these power plants a few years ago through the Pakistan Development Fund proceeds.
The government's debt of Rs103.7 billion has to be replaced through bank borrowings, which will substantially reduce the final price, according to the sources. The 70 pc cost of the projects need to be converted into long-term financing for the privatisation of the power plants in line with the tariff-based capital structure.
A senior government official said that the LNG plants' price discovery was not immediately possible; therefore, these plants might not be offered to the Qatari government for investment purposes. Finance Minister Miftah Ismail and former prime minister Shahid Khaqan Abbasi also attended the meeting.
The sources said that it was decided that Pakistan should offer 10 pc stakes to Qatar in the government-owned listed companies, in line with the similar offer that it has made to the United Arab Emirates.
It was also decided on Monday that Pakistan should offer 51 pc stakes in The Roosevelt Hotel, New York, and the PIA along with the management control to Qatar. But the PIA law bars selling more than 49 pc stakes and giving management control to any other party.
It was decided that the legal process to amend the PIA law should immediately be initiated to do away with the restricting clause.
The Roosevelt Hotel is owned by the PIA through a PIA-Investment Limited. The PIA-IL holds its stakes through a subsidiary which is registered in the British Virgin Islands. The hotel, located at a highly priced location, was closed in December 2020. (ANI)