At least seven state-owned entities, including Pakistan International Airlines, would be privatised, the government has informed the International Monetary Fund to complete the $7 billion loan programme.

The government has pledged to the Fund that it would sell the national flag carrier by July, The Express Tribune reported. But the fate of the PIA-owned Roosevelt Hotel in New York remains undecided following the US decision to terminate its $228 million lease agreement early.

In July, Pakistan and the IMF finalised a three-year, $7 billion aid package designed to help the country establish macroeconomic stability and foster stronger, more inclusive growth.

The 37-month Extended Fund Facility programme includes six reviews throughout the duration of the bailout. The release of the next tranche, approximately $1 billion, will depend on the outcomes of the forthcoming performance review.

Cash-strapped Pakistan is looking to offload a 51-100% stake in debt-ridden PIA to raise funds and reform bleeding state-owned enterprises as envisaged under a IMF programme.

It merits mentioning that the national carrier is a public limited company, with approximately 96% of its capital owned by the government.

Last year, an overseas Pakistani group offered Rs100 billion for the national airline after the government attracted only a Rs10 billion bid for the national flag carrier against the valuation of Rs85 billion from a single bidder, Blue World City Consortium..

The Al-Nihang’s Group has set seven conditions, including Rs100 billion for the PIA acquisition, assuming responsibility for all existing PIA liabilities, estimated at Rs250 billion, and ensuring full payment of outstanding obligations as part of the proposal.

In a briefing on Pakistan’s stalled privatisation programme, federal officials informed the IMF that they aim to privatise five to seven entities, which include PIA, three financial institutions, and three power distribution companies. Among the financial institutions slated for privatisation is Zarai Taraqiati Bank Limited, with hopes of completing its sale by November.

The government has also communicated to the IMF that a decision from the Cabinet Committee on Privatisation is pending regarding the future of the Roosevelt Hotel. Owned by PIA, the hotel is situated in one of the most expensive real estate areas globally, and officials are weighing whether to sell it outright or enter into a joint lease agreement.

The Roosevelt Hotel, which boasts 1,025 rooms, was leased by Pakistan to the Immigrant Housing Business under the New York City Government for three years starting in July 2023. But the IMF was informed that the New York City government has issued a notice to terminate the lease effective July—one year earlier than scheduled. The early termination is projected to result in an approximately $80 million loss in business, as the city had secured the hotel at a rate of $210 per room for the third year.

It was revealed that the Cabinet Committee on Privatization would soon decide on the privatisation strategy for the hotel. The decision would be based on recommendations from a committee led by Ali Pervaiz Malik, the federal minister for petroleum.

The committee has suggested that the Roosevelt Hotel be privatized through an open bidding process, especially since Saudi Arabia did not express formal interest in acquiring the PIA-owned property.

Authorities have informed the IMF that three parties may participate in the bidding for the Roosevelt Hotel. This includes two bidders who previously withdrew due to the government’s refusal to waive an 18% sales tax on aircraft leases and to remove Rs45 billion in liabilities from PIA’s balance sheet before privatization.

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Moreover, the government also expressed its intention to sell three power distribution companies—Faisalabad, Islamabad, and Gujranwala—by December this year. A decision on whether to sell these entities collectively or individually will be based on recommendations from a financial adviser.

The news outlet, while citing sources, reported that the United Arab Emirates has shown interest in acquiring First Women Bank Limited as a full commercial bank, with a potential deal expected by the end of May. But the UAE prefers a government-to-government arrangement rather than participating in an open bidding process.

The government is also in the process of hiring a financial advisor to facilitate the sale of ZTBL, with hopes to finalise the transaction by November. Furthermore, authorities anticipate selling the House Building Finance Company next month.