Subrata Roy Sahara's great hotel sale

Aug 24 2014, 01:38 IST
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Sahara bought both the hotels in 2012. Sahara bought both the hotels in 2012.
SummaryIt’s not just about a distress sale; the Sahara-owned hotels on the block in New York...

It’s not just about a distress sale; the Sahara-owned hotels on the block in New York and London present some intriguing elements involving the current management

There's never quite been a sale like this before: three iconic hotel properties in New York and London being sold from inside Delhi’s Tihar Jail, known for having housed some of India’s most notorious criminals, and now Sahara Group chairman Subrata Roy. His release on bail depends on how fast he can strike a deal for the sale of the properties, but there’s more to it than meets the eye.

London’s Grosvenor House is a historic landmark, but it’s the other two—the iconic Plaza Hotel and the boutique-style Dream Hotel in downtown Manhattan—that have a strong Indian connection. The Dream Hotel, a centrally-located hotel that attracts the Big Apple’s beautiful people, was the prized property of Vikram Chatwal Hotels, a spin-off from his father Sant Singh Chatwal’s Hampshire Hotels and Resorts.

Vikram Chatwal, a New York celebrity who features regularly in the city’s society pages, opened Dream Hotel in 2004 and its avant-garde design, combined with luxurious interiors and a celebrity chef, caught the imagination of the city’s party people. It was sold to the Sahara Group in 2012, but Hampshire Management, Chatwal’s company, continues to manage the property and his association still helps to attract the ‘in’ crowd.

The Plaza, one of America’s most famous hotels that has hosted crowned heads, presidents and celebrities, also has a Chatwal connection. Hampshire Hotels had signed a widely publicised 20-year contract to run the Plaza’s Oak Room, Oak Bar and the famed Palm Court—a deal the previous owners from Israel made before the sale to Sahara. For years, the quintessential Plaza experience, for those who could afford it, was having high tea at the Palm Court. Presidents, dignitaries and royalty have enjoyed its champagne and tiers of finger sandwiches and chocolate Bon Bons. In fact, New York tabloids were abuzz with speculation that the Chatwals were keen to take over the management of the entire property from Fairmont.

Sahara bought both the hotels in 2012, but the management still rests with Chatwal at the Dream Hotel and Fairmont at the Plaza. Sahara had bought a 70% stake in the Plaza from former owners, the El Ad Group, for $600 million. Kingdom Holding, the investment vehicle of Saudi billionaire Prince Alwaleed bin Talal, holds a 25% stake. Sahara followed up by buying

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