India’s Sahara group is said to be considering a $1.3 billion (£980 million) offer from a new suitor for its three prized overseas hotels, including London’s Grosvenor House and the Plaza hotel in New York.
A consortium of family office investors, comprising Britain’s 3 Associates (led by Jesdev Saggar) and others from the Middle East, made the offer to acquire Sahara group’s majority stake in the three marquee hotel properties – the Grosvenor House in London, the Park and Dream Downtown hotels in New York.
Managing director at 3 Associates, Saggar, said they made Sahara 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 (in India) and the Roy family,” he said, referring to the group’s founder, Subrata Roy.
While there were no immediate response from the Sahara group on the offer, 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 transactions worth over £314 million 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”.
To a question on 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 chief Roy was arrested in March 2014 after the group failed to comply with an Indian court order to refund money raised from millions of small investors by selling them bonds later ruled to be illegal. Sahara claims it has repaid 95 per cent of the investors’ money directly.
Roy is currently out on parole and has been trying hard to raise funds, including through refinancing of loans on its overseas hotels.
In March last year, the Bank of China 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 and the two hotels in New York – from Bank of China was “cross collateralised and cross guaranteed”.
Subsequently, Sahara reached a $850m (£640m) refinancing deal with India-born billionaire brothers David and Simon Reuben and averted the “default-triggered” sale of Grosvenor House.
Grosvenor House, a landmark on London’s Park Lane and designed by acclaimed architect Sir Edwin Lutyens, was bought by Sahara group in 2010. The US hotels were purchased later. The three hotels were acquired between 2010-2012 at an estimated valuation of $1.55bn (£1.17bn).
