New Delhi: Sahara group today rejected a new USD 1.3 billion offer from a group of investors for its three prized overseas hotels, terming it a "devious attempt" to lower the price and disturb the sentiment of other bidders making "much higher" offers.
A consortium of family office investors, comprising of Jesdev Saggar-led 3 Associates of the UK and others from the Middle East, has made the offer to acquire Sahara group’s majority stake in the three marquee hotel properties — the famed Grosvenor House in London, Park Plaza and Dream Downtown hotels in New York.
When contacted, Saggar, Managing Director at 3 Associates, told a news agency they have made a “very compelling offer” and it was a long-term investment opportunity for them. “This is a long-term investment opportunity for us. We have submitted a very compelling offer. It is now up to the Supreme Court and the Roy family,” he said.
While there were no immediate comments from Sahara group on whether it considered the latest bid to be good to be accepted, it may trigger a bidding war as the beleaguered Indian group was already in talks with Qatar-based investors for a potential deal for these hotels. 3 Associates founders and its Multi Family office network has completed over 314 million pounds worth transactions since 2014, including hotels and commercial offices in the UK, UAE and India.
It claims to have “access to one of the largest pools of family office equity in the Middle East”. When asked whether they were looking at more assets in the UK and other places of other distressed Indian groups, Saggar said, “We are focused on the UK”. Sahara group, whose chief Subrata Roy was in jail for over two years in connection with a long-running dispute with markets regulator Sebi and is currently out on parole, has been trying hard to raise funds including through refinancing of loans on its overseas hotels.
In March last year, Bank of China had put Grosvenor House under “administration” for recovery of its loans from Sahara after declaring “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 the two prime hotels in New York — from Bank of China was “cross collateralised and cross guaranteed”.
Subsequently, Sahara reached a $850 million (Rs 5,500 crore) refinancing deal with India-born billionaire brothers David and Simon Reuben and averted the ‘default-triggered’ sale of Grosvenor House hotel property. Grosvenor House, a landmark on London’s Park Lane and designed by acclaimed architect Sir Edwin Lutyens, was bought by Saharas in 2010. The two US hotels were purchased later.
The three hotels were acquired between 2010-2012 at an estimated valuation of $1.55 billion. The 110-year-old Plaza in New York is situated off Central Park and its ownership has changed hands several times. Currently, Sahara has about 75 per cent and remaining 25 per cent is with Prince Al-Waleed bin Talal of Saudi Arabia.
In the past, its owners included real estate tycoon and the current US Presidential candidate Donald Trump, who married his second wife Marla Maples in this hotel. The hotel, which has 282 rooms in addition to several condos, restaurants and shops, had hosted the famous Plaza Accord to devalue the US dollar in 1985.
Sahara group has been engaged in a legal battle with 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 per cent of the investors’ money directly.