Sahara chairman Subrata Roy. The Supreme Court recently ordered the auction of Aamby Valley resort town near Pune, which the group claims has Rs1 trillion valuation. Photo: Abhijit Bhatlekar/Mint
Sahara chairman Subrata Roy. The Supreme Court recently ordered the auction of Aamby Valley resort town near Pune, which the group claims has Rs1 trillion valuation. Photo: Abhijit Bhatlekar/Mint

Sahara’s The Plaza, Dream Downtown hotels in New York draw interest from middle-east firm

The Sahara group is in talks with a large middle-eastern enterprise for sale of The Plaza and Dream Downtown hotels in New York, which are estimated to fetch a billion-dollar valuation

New Delhi/New York: Embattled Sahara group is in talks with a large Middle-Eastern enterprise for sale of its majority stake in two prime New York hotels—including the iconic The Plaza which was once owned by Donald Trump—estimated to command a billion-dollar valuation.

Sahara holds 85% in New York’s Dream Downtown hotel and 70% in The Plaza, where Trump—then a real estate tycoon and owner of the luxurious property—married his second wife Marla Maples in December 1993.

Name of the interested buyer from Middle East could not be ascertained but those having shown interest earlier include a Qatar-based sovereign investment fund and also some investors from China and the US.

People with the knowledge of the matter said talks are underway and could be concluded soon for sale of stake in the two hotels held by Sahara, which is raising funds by selling various assets in India and abroad for depositing money in a special investor refund account set up under Supreme Court orders.

Market estimates pegged the combined valuation of the two hotels, which were acquired by Sahara in 2012 in two separate transactions within months, to be in excess of $1 billion in a sale deal despite the depressed real estate sector.

The 110-year-old The Plaza is situated off Central Park and its ownership has changed hands several times. The hotel, which has 282 rooms in addition to several high-end condos, restaurants and shops, hosted the famous Plaza Accord to devalue the US dollar in 1985.

When contacted, a Sahara group spokesperson declined to disclose any deal value at this stage or the name of the interested buyer but confirmed that the talks are underway with a Middle-East entity. “Sahara is in process of selling (stake in two US hotels) to one large enterprise of Middle East. We would not be able to share the deal value at this stage," the spokesperson told PTI in reply to queries in this regard.

Asked about reports that Ashkenazy Acquisition Corp., a New York-based investment and development company, along with Plaza’s minority owner Prince Al-Waleed bin Talal of Saudi Arabia looking to buyout Sahara from the property, the spokesperson said, “The news pertaining to one M/s Ashkenazy Acquisition Corp. buying out Sahara stake is completely wrong."

Queries mailed to Kingdom Hotel Investments, a holding company for the prince, remained unanswered.

There have also been reports in the US media that Sahara has roped in real estate consultancy major JLL to find a buyer for its stake in the Plaza, which alone can fetch around $500 million.

JLL did not reply to queries on this.

The group, which was asked to deposit over Rs24,000 crore in the special account managed by regulator Sebi, has maintained it has already refunded more than 95% of investors’ money directly.

As per latest disclosures by the regulator and statements from Sahara group, Sebi has refunded about Rs100 crore from the special account, estimated to have about Rs15,000 crore of deposited money and interest earned, to the investors who have filed their claims.

Earlier this month, a Supreme Court-ordered auction process for Sahara group’s Aamby Valley also started, with the official liquidator inviting bids at a reserve price of Rs37,392 crore.

Sahara, which pegs the project’s market valuation at over Rs1 trillion, however, said the liquidator has initiated only first two steps of the auction by issuing advertisement for interested bidders and verifying their KYC details and the sale would be withdrawn if Rs1,500 crore is deposited before the next date of hearing in the Supreme Court.

The property, described by the liquidator as an “ultra- exclusive chartered city", includes timber chalets, modern villas, golf course, hospital, school and airport, among other amenities.