Pakistan to inject $35m to save Roosevelt Hotel: magazine
Pakistan is considering injecting $35.58 million as second bailout package for the Roosevelt Hotel in Manhattan, New York, that is owned by Pakistan International Airlines Investment Limited (PIAIL), a hotel industry magazine reported on Friday.
The Hotel Management, a magazine that started in 1922 in New York, also reported that Pakistan’s Economic Coordination Committee of the cabinet had discussed setting up of a panel to provide this bailout package for the property.
According to the report, in September 2020, the panel approved $142m to cater to the immediate financial needs of the hotel. This amount was arranged as a loan from the National Bank of Pakistan with a per annum mark-up of $5.9m.
Additionally, it approved $13m as an annual carrying cost until a lease agreement is finalised with a joint venture partner.
The report noted that PIAIL risked losing the Manhattan property as well as the Scribe Hotel in Paris in 2019 after a court of British Islands enforced an international arbitration decision that involved handing over the two properties as settlement to Tethyan Copper Company (TCC) for cancelling its mining licence in Balochistan.
PIAIL, a subsidiary of Pakistan International Airlines, is incorporated in British Virgin Islands. TCC is a joint venture held by Barrick Gold and Antofagasta.
Pakistan had cancelled TCC’s mining licenses on Reko Diq gold and copper mines in Balochistan, citing irregularities, while TCC claimed that they were wrongly stopped from undertaking mining operations.
The hotel, which opened in 1924, has 1,015 rooms and 52 suites. Other media reports suggest that Pakistan still risks losing these valuable real estate properties in the United States and France.
In 2019, the International Center for Settlement of Investment Disputes, a World Bank quasi court, imposed a hefty $5.97 billion fine on Pakistan in 2019 over this dispute. At one stage, Pakistan was seeking an out-of-court settlement with TCC.