Back3 Associates tells SC it plans to buy Sahara’s overseas hotels for $1.3 bn
Firm tells SC it plans to buy Grosvenor House Hotel in London, and Plaza Hotel and Dream Downtown in NY
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New Delhi: United Kingdom-based investment firm 3 Associates Capital Management Ltd informed the Supreme Court (SC) on Wednesday about its intent to buy Sahara India’s stake in its overseas hotels for $1.3 billion.
The properties include Grosvenor House hotel in London and Plaza Hotel and Dream Downtown in New York.
“We are very serious about the deal. We have already deposited $1 billion in an escrow account in Abu Dhabi," senior advocate Shyam Divan, representing Knight Frank India, a real estate consultancy that is negotiating on behalf of 3 Associates, said.
Sahara group chief Subrata Roy’s lawyer Kapil Sibal confirmed that negotiations are underway with 3 Associates.
Meanwhile, a bench comprising chief justice T.S. Thakur, justices Anil R. Dave and A.K. Sikri extended group chief Subrata Roy’s parole till 16 September on the condition that an additional ₹ 300 crore be deposited with the court by September.
Sibal expressed the group’s displeasure with the 3 Associates Capital Management’s proposal, saying that the bid was too low.
“At this rate, it will take 20 years for Sahara to repay its investors," chief justice Thakur observed.
Sibal told the court that Roy is confident that investors will be repaid within a year and a half. Sahara has been in negotiations for the sale of its overseas hotels for close to three years.
A 17 March Bloomberg report said that the Plaza Hotel and Dream Downtown were poised to go on sale in April as a package.
Billionaire brothers David and Simon Reuben hold the mortgage on the Plaza and have scheduled a foreclosure auction for 26 April, the report said. The Reubens bought the loan from Bank of China Ltd after a default by Sahara, the report said.
CNBC-TV18 reported on 7 July that Qatar Investment Authority, the sovereign domestic and foreign investment agency of Qatar, had agreed to buy Sahara’s stake in the three hotels.
Roy and two of his associates had been in judicial custody since 4 March 2014 for failing to deliver on promises made to return the money two Sahara firms collected from depositors. On 26 March that year, the court set the bail amount at an unprecedented ₹ 10,000 crore—half in cash and half as a bank guarantee.
In March, Sahara completed the cash payment of ₹ 5,000 crore towards bail for Roy and the two associates, and only the bank guarantee of ₹ 5,000 crore is pending.
Securities and Exchange Board of India (Sebi) moved the apex court in August 2012 to recover ₹ 36,000 crore from Sahara to refund investors who purchased securities from two group firms through schemes that the market regulator found illegal. Sebi asked the court to appoint a receiver who would dispose of Sahara’s domestic and offshore properties and raise the money.
The court is also considering appointing a receiver to sell Sahara’s properties if the ongoing talks do not fructify.
On Wednesday, Sebi told the court that 8 of Sahara’s properties have been sold for a total of ₹ 196 crore.
Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s dispute with the Securities and Exchange Board of India. Mint is contesting the case.
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