1. Subrata Roy’s Sahara group averts Grosvenor House sale; seals $850 million loan deal

Subrata Roy’s Sahara group averts Grosvenor House sale; seals $850 million loan deal

In a major deal for Subrata Roy's Sahara group, billionaire brothers David and Simon Reuben are set to take over Indian group's Bank of China loan...

By: | London | Updated: June 7, 2015 7:17 PM
subrata roy sahara

Sahara Group has been trying to raise funds to secure release of its chief Subrata Roy, who has been lodged in Tihar Jail for over a year in a case involving raising of funds from investors to the tune of over Rs 24,000 crore. (Reuters)

In a major deal for Subrata Roy’s Sahara group, billionaire brothers David and Simon Reuben are set to take over the crisis-hit Indian group’s Bank of China loan for its three hotel properties — thus averting a ‘default-triggered’ sale of the iconic Grosvenor House hotel in London.

When contacted, a Sahara group spokesperson confirmed that a “last-minute deal” has been negotiated with the Reuben brothers and the talks are in final stages now, but did not comment on the deal size.

A report in the Sunday Times, however, pegged the debt refinance deal at $850 million (Rs 5,500 crore).

The Grosvenor House hotel was put on sale by its lender Bank of China earlier this year after a ‘technical default’.

Sahara Group has been trying to raise funds to secure release of its Chairman Subrata Roy, who has been lodged in Tihar Jail for over a year, through monetisation of its various assets, including the three overseas hotels.

When contacted, a Sahara group spokesperson said in a statement that the group has “successfully managed to avert the enforced sale of the Grosvenor House Hotel in London, one of the best-known iconic hotels in the world.

“A team led by Group Chairman has successfully negotiated a last-minute deal with the Reuben Brothers, who are now in the final stage of taking over the loan portfolio from the Bank of China. The other properties owned by the group are the New York Plaza hotel and the New York Dream hotel.”

The group further said that the “deal restores Sahara’s ability to renegotiate the loan terms with the new lender, or with third parties.

“The negotiations that are already underway are expected to generate new money for meeting the Group’s immediate requirements in the Supreme Court of India.

“It is a matter of great satisfaction to our Chairman, Subrata Roy Sahara, that the Indian flag will continue to fly on these three globally-renowned hotels,” it added.

It, however, refused to share any further information “at this time, on legal advice, to protect the on-going negotiations.”

The Sunday Times report said that “David and Simon Reuben, whose empire stretches from data centres to horse racing, clinched the purchase of two loans against the properties from Bank of China late last week” and they have given a four-month extension to the Sahara Group.

Bank of China put Grosvenor House under “administration” early in March for recovery of its loans, while Deloitte and realty consultant JLL were mandated to find a buyer.

At that time, Sahara Group had said it was still working on a refinancing transaction to repay the loans to Bank of China and regain control of the iconic property.

Sahara had also said that the London hotel was being “treated under default” because Bank of China has declared “an event of default” on the US loans due to some “technical breaches” in the financial covenants.

The loan on Sahara’s three hotels from Bank of China was “cross collateralized and cross guaranteed”.

Sahara had said that the debt servicing for the UK and US loans “has always been completely proper and timely”.

Sahara’s refinancing arrangements involved getting a fresh loan for the three properties. A part of the proceeds would be given to Bank of China for release of Grosvenor House from “administration”, while the remainder could be deposited with Sebi to secure release of Roy and two other top officials from Tihar Jail.

Grosvenor House, a landmark property on Park Lane in London designed by acclaimed architect Sir Edwin Lutyens, was purchased by Sahara in 2010.

The two hotels in the US were purchased later.

The three hotels were acquired between 2010-2012 at an estimated valuation of USD 1.55 billion.

The group has been engaged in a legal battle with Indian markets regulator Sebi for a long time over a case involving raising of funds from investors to the tune of over Rs 24,000 crore. Sahara, however, claims it has already repaid 95 per cent of the investors money directly.

  1. S
    Smriti Pathak
    Jun 17, 2015 at 11:54 am
    Well wishes for Sahara. There was lot of confusion that Sahara will hold the hotel and will collect fund for that, now so deal is finally signed off worth $850m. So what will be the next attempt for Sahara India, bail out Subrata Roy so these kind of issues can be resolved soon. There won't be any issue if he was out of prison.
    Reply
    1. B
      bergholz monika
      Jun 11, 2015 at 2:29 pm
      Are you a business man or woman? Do you need funds to start up your own business? Do you need loan to settle your debt or pay off your bills or start a nice business? Do you need funds to finance your project? We Offers guaranteed loan services of any amount and to any part of the world for (Individuals, Companies, Realtor and Corporate Bodies) at our superb interest rate of 3%. For application and more information send replies to the following E-mail address: Thanks, Mr. Barry more.
      Reply
      1. D
        Deepak Arora
        Jun 16, 2015 at 5:47 pm
        This is good news for Sahara India that still Grosvenor House hotel belongs to Sahara. Sahara had manage the deal at last minute and sealed off it.
        Reply
        1. M
          Monika Awasthi
          Jun 18, 2015 at 12:07 pm
          Well wishes to Sahara. This deal really restore the capability of Sahara and trust in it. Sahara managed to negotiate the deal at last minute and will hold the ownership. Now Sahara will focus on subrata roy's bail because it's been also delaying very long now. It's over year and couple of months that might enough for Mr. Roy. So now let him out of all the trouble.
          Reply
          1. N
            Namrata Arora
            Jun 18, 2015 at 10:29 am
            Good news for Sahara, this might make people feel that Sahara still stands no matter how bad the situations are.
            Reply
            1. N
              Namrata Arora
              Jun 18, 2015 at 10:30 am
              Well wishes for Sahara. There was lot of confusion that Sahara will hold the hotel and will collect fund for that, now so deal is finally signed off worth $850m. So what will be the next attempt for Sahara India, bail out Subrata Roy so these kind of issues can be resolved soon. There won't be any issue if he was out of prison.
              Reply
              1. R
                Ranjeet Singh
                Jun 16, 2015 at 4:43 pm
                I am pretty much happy that Grosvenor House hotel still have indian flag on it. I also hope that negotiations will be made soon. It is world cl iconic hotel and if it comes under indian that should be good.
                Reply
                1. S
                  shaifali Sinha
                  Jun 17, 2015 at 10:54 am
                  I am happy to see that Sahara still holds Grosvenor House hotel and other two, Grosvenor House hotel is world cl iconic hotel and if Indian flag is top on that that is also matter of pride for me. Well wishes from my side and hope mr. roy also get out of the jail soon.
                  Reply
                  1. V
                    Vishwas Patil
                    Jun 8, 2015 at 6:20 am
                    Congrats! Properties liable for attachment and auction to recover under SC order are mortgaged and used to repay old loan. This new agreement will sure keep SC or India legal system out. SC just giving unending rope to escape the auction and the prosecution. Faith in SC shaken.
                    Reply
                    1. Load More Comments

                    Go to Top