Investor Group signs $1.55B deal to refinance Plaza Hotel debt

A founding member of the Fugees, a New York sports agent, a Saudi prince and an Indian company trying to spring its chairman from jail are all part of the saga to control New York’s storied Plaza Hotel.

In the latest development, a group of investors agreed to lend $1.55 billion to the owner of the Plaza, a move aimed at gaining control of the landmark property.

About $900 million of the new one-year loans will go toward retiring debt on the Plaza and two other hotels that is held by Bank of China, according to members of the investor group, Mirach Capital Group. The rest will provide the hotels’ owner, Indian conglomerate Sahara Group, with cash it is expected to use toward a bail payment for its chairman, Subrata Roy.

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Roy has been in a New Delhi jail since March on criminal charges after the government alleged his company owes about $6 billion to the company’s bondholders. He and Sahara have denied the charges and say the debt has been paid, but his incarceration prompted the company to begin marketing the hotels to raise bail money.

The Indian Supreme Court is slated to hold hearings Tuesday about Sahara’s plans for refinancing debt, Sahara said in a statement Friday.

Mirach Capital, which is funded primarily by a wealthy Indian family, has about 10 investors including Pras Michel, a founder of the Grammy-award-winning hip-hop group the Fugees, and David Sugarman, the New York sports agent whose clients include Pittsburgh Steelers defensive back Antwon Blake and former basketball star Kenny Anderson