BackMirach says 3 Sahara hotels can fetch maximum $1.67 billion
The Plaza, Dream Downtown and Grosvenor House were acquired by Sahara at an estimated valuation of $1.55 billion
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New York: As the blame-game continues over their floundered deal, US-based Mirach Capital has claimed that Sahara’s three overseas hotels can fetch a maximum valuation of $1.67 billion (10,400 crore).
These three iconic hotels—The Plaza and Dream Downtown in New York and Grosvenor House in London—were acquired by Sahara between 2010-2012 at an estimated valuation of $1.55 billion. Market experts, however, peg their current valuation at upwards of $2.2 billion, after taking into account the appreciation in their values. While both parties have warned each other of legal action, people familiar with the matter said Mirach is still trying to reach out to Sahara for reviving their deal and is also open to the idea of depositing the necessary funds directly with Bank of China, from which the crisis-hit Indian group has taken a loan. Mirach, which had earlier offered a $2.05 billion syndicated financing arrangement to Sahara, has also offered a full buyout transaction for the three hotels, even as it has been accused by the crisis-ridden Indian group of cheating amid a row over a “forged" Bank of America letter purportedly guaranteeing funding support.
Sahara says it got suspicious on 1 February about the purported letter showing Mirach having blocked sufficient funds with Bank of America for the proposed transaction, following which it did its own due diligence and found that the said letter was indeed “forged". The group has warned Mirach of legal action, while the US-based firm, run by Indian-origin businessman Saransh Sharma, has accused Sahara of going back on the deal and has sought a “formal apology".
Sharma, who is himself facing legal lawsuits for a few cases in the US and has reportedly admitted to wrongdoings in the past in a case relating to stealing database, has also warned of initiating legal recourse and seeking compensation from Sahara. The deal would have helped Sahara raise funds for securing bail of its chief Subrata Roy and his two colleagues, who have been lodged in Tihar jail for almost a year now in a case relating to repayment of investor dues totalling over 20,000 crore.
Sharma, who was earlier being seen as a white knight arranging necessary funds for Sahara, said that “the enterprise value of The Plaza, Dream and Grosvenor hotels is $1.67 billion".
“However, based on Sahara’s ownership of equity, that figure is closer to $1.39 billion," he said in reply to queries about his ongoing spat with Sahara. He also claimed that the actual value of Sahara’s stake in these three hotels would further come down to $1.34 billion, after taking into account the “distressed nature of the circumstances" and other factors. “Consequently, the current valuation of these properties has also suffered. By conservative estimates the three offshore properties could be worth as little as $700 million and by best efforts basis as much as $1.67 billion collectively," he said. Sahara, on Thursday, said it has been cheated by Mirach Capital with a “forged letter" of $2 billion funding through Bank of America.
Mirach further said that “given the allegations and false statements that Sahara India Pariwar has released publicly against Mirach, which we both know are not accurate, it is with utmost displeasure that I write this letter to you today".
“Mirach approached Sahara India Pariwar to help resolve a situation that we felt was in mutual benefit for Sahara, Sebi, Bank of China, the creditors and Mirach... It is rather unfortunate that despite providing you with a loan package that we were ready, willing and able to close by the 20 February 2015 deadline, you have failed to perform once again." In its first offer, Mirach said it “can still proceed with the loan structure that we have already executed and drafted paperwork for. However, in order to proceed with this, Mirach will require that Sahara publicly retract its statement with a formal apology for the tarnishment that has been caused on Mirach’s reputation and its business associates and members of its investor network.
“Alternatively, Mirach can proceed with the acquisition of the properties as has been consistently stated. “Given the work that has been done over the past seven months, it would be the quickest solution that you allow us to acquire the several properties that were included in the $2050 million loan package instead of wasting another four months as you are stating publicly and to Sebi, which we both know is not true. We can have all documents redrafted in order to structure this as a sale and still meet the 20 February 2015 deadline.
“If the above two options are not acceptable to you then my only proposal is that the $2.6 million that was deposited to cover due diligence costs, including legal, accounting and consulting bills, be returned to Sahara in order to end business matters between us permanently." Mirach had said on Saturday the syndicated loan package offered to Sahara was “no longer on the table", but it offered a complete buyout of Sahara’s three iconic hotels—Plaza and Dream Downtown in New York, as also Grosvenor House in London. Sharma, who himself is facing lawsuits in the US and in the past has reportedly admitted to stealing database of a former employer, rejected the allegations of forgery in this loan deal and accused Sahara group of repeatedly undermining the transaction, wasting the time of “its investors, Sebi and the Supreme Court". The purported transaction was to involve transfer of loans on Sahara’s three iconic overseas hotels—two in New York and one in London—to a syndicate of investors, for which Mirach had claimed to have initially deposited $1.05 billion in a Bank of America account. The financing package was to be expanded to about $2 billion eventually. Sahara was looking to use part of these funds to ensure the release of Roy and his two colleagues from Tihar jail, where they have been lodged for almost a year in a case relating to repayment of investors’ money totalling over 20,000 crore. Bank of America has already said it was not at all involved in any such transaction, following which the entire financing arrangement began unravelling and resulted in allegations of “forgery" and subsequent counter-allegations. After BofA’s disclosure, Mirach said it has “determined" a bank for the funding plan but did not name it.
(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 Sebi. Mint is contesting the case.)
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