Sahara Group says not bidding for Grosvenor House hotel

With its prized property, Grosvenor House, put on sale by lender Bank of China for a loan 'default', crisis-hit Sahara group Thursday said it is not participating in any re-auctioning of the London hotel.

New Delhi: With its prized property, Grosvenor House, put on sale by lender Bank of China for a loan 'default', crisis-hit Sahara group Thursday said it is not participating in any re-auctioning of the London hotel.

The bank has Grosvenor House under "administration" to recover its loans, while Deloitte and realty consultant JLL have been mandated to find a new buyer through an auction.

Those reported to be interested include Abu Dhabi Investment Authority, China's Fosun Group, Constellation Hotels and M&G Prudential, while sources had earlier said that Sahara group is also in the fray through some 'financier', even as it was continuing to work on a refinancing arrangement with Bank of China.

Some media reports had also said that Sahara, through its company Aamby Valley City Mauritius, was participating in the re-auctioning of the Grosvenor House Hotel, London.

"In the same context, we would hereby like to clarify that Sahara or any of its group companies is not participating in any such re-auctioning," Sahara group said in a statement.

The group had earlier said that it is working on a refinancing transaction to repay the loans to Bank of China and regain control of the iconic property.

Sahara has been trying to raise funds to secure release of its chief Subrata Roy, who has been lodged in Tihar Jail for over a year, through monetisation of its various assets, including the iconic London hotel.

Sources had earlier said that Sahara group is still negotiating a 'refinancing' deal to transfer the Bank of China loans to some other lender, while it was also working with a 'financier' backed by some global banks to ensure a better valuation of the property - thus working with a 'two-way strategy' to ensure that it gets necessary funds to be deposited for Roy's release and also retain the control of the hotel it had purchased in 2010.

According to Sahara, the London hotel was being "treated under default" because Bank of China 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".

The three overseas hotels have been at the centre of Sahara's fund-raising plans and were acquired between 2010-2012 at an estimated valuation of USD 1.55 billion.

Market experts peg their current valuation at upwards of USD 2.2 billion, after taking into account the appreciation in their values, but the bidders may put in lower bids given the '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 that it has already repaid 95 per cent of the investors' money directly.

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