This is weird. DNA India is reporting that Sahara has entered the fray for buying its own Grosvenor House hotel, which was put on sale by its lender Bank of China after a technical default. The Indian group has been trying to raise funds to secure the release of its CEO Subrata Roy, who has been in jail for over a year, through the use of its various assets, including London hotel.
Sources said that Sahara group is still negotiating a 'refinancing' deal to transfer the Bank of China loans to some other lender, while it has also entered the bidding fray for Grosvenor House through a 'financier' backed by some global banks to ensure a better valuation of the property.
Other bidders are said to be Abu Dhabi Investment Authority, China's Fosun Group, Constellation Hotels Holding and M&G Prudential.
Bank of China put Grosvenor House under "administration" early in March for recovery of its loans, while Deloitte and realty consultant JLL have been mandated to find a buyer.
AS DNA India further reports, earlier in March, Sahara Group had said it was 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 -- Grosvenor House in the UK and two other prime hotels (The Plaza and Dream Downtown) in New York -- from Bank of China is "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".
The three overseas hotels have been at the centre of Sahara's fund-raising plans.
According to sources, Sahara group's refinancing arrangements involved getting a fresh loan from 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, where they have been lodged for a full year now.
Grosvenor House, a landmark property on Park Lane here that was designed by acclaimed architect Sir Edwin Lutyens, was purchased by Saharas in 2010. The two hotels in the US were purchased later.
The three hotels were acquired between 2010-2012 at an estimated valuation of US $1.55 billion. Market experts peg their current valuation at upwards of US $2.2 billion, after taking into account the appreciation in their values, but the bidders may put in lower bids given 'distress' nature of the sale.
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% of the investors money directly.