Sahara to mortgage hotels to raise $1.7 bn bail money for chief Subrata Roy

Sahara conglomerate would rather mortgage its hotel properties than sell them to raise the $1.7 billion in bail money for its jailed chairman, reports quoted a senior company executive as saying.

Sahara chairman Subrata Roy had been looking for a buyer for the three hotels, including New York's Plaza hotel and London's Grosvenor House, for the past month, using a makeshift office in his New Delhi jail cell to negotiate a deal.

Roy yesterday sought the permission of the apex court to keep the office beyond the expiry of a Tuesday deadline, according to his lawyers, as talks continued with potential buyers.
The company had received offers from several buyers, including sovereign wealth funds, however, it had to yet make a decision, the executive added.

For the present, he noted, the company was focused more on raising funds through a loan on these properties. The executive, who spoke to Reuters, requested anonymity as he was not authorised to speak to the media, according to the report.

The sale of properties was the last priority, he said, adding, the company would sell over a period of time, but right now the focus was to raise money by mortgaging the assets.

Meanwhile, Roy who is in prison since 4 March, told the Supreme Court on Friday that a deal he had struck with the Sultan of Brunei for sale of his three hotels in London and New York was in danger of getting cancelled due to a foreign media report and sought 15 more days to complete the deal, The Times of India reported.

Roy's counsel, senior advocate S Ganesh, told justices T S Thakur and R Banumathi that following hard negotiations over two weeks, Roy was on the verge of clinching the deal but the report led to massive protests outside the hotels - Grosvenor House in London, and the Plaza and the Dream Downtown in New York.

According to Ganesh, the protests had seriously threatened the deal, which had run into serious problem and the deals were in danger of getting cancelled. He added it was a monumental setback for the company and worse, for reasons beyond its control.

The Sahara chief had been given one last opportunity, the deadline for which would end on Monday, to conclude the deal for sale of the hotels abroad, get the money and fulfill the condition, Rs5,000 crore in cash and Rs5,000 crore through bank guarantee - to secure release on bail from Tihar jail.