Sahara bids to reclaim UK hotel as Subrata Roy remains in jail

Sahara Group has not enough money to bail out its chief, Subrata Roy, but is making a fresh attempt to acquire London's Grosvenor House, a hotel which it had lost control of after it defaulted on loans taken to buy it earlier.

The group is bidding for the hotel through its subsidiary, Amby Valley Mauritius and is among the top bidders, according to a report in The Economic Times.

Other bidders include Constellation Hotels Holding, M&G Prudential, Abu Dhabi Investment Authority and China's Fosun Group and bids are valued up to Rs6,150 crore, the report added.

The Sahara group's move comes at a time when the group has failed to raise Rs10,000 crore needed to bail out its boss Subrata Roy who has been in Tihar jail for the past 14 months in a contempt of court case involving refund of Rs24,000 crore to investors.

The question is where will the group raise funds from in case it wins in the bid?

Meanwhile, a report in the Mumbai Mirror had earlier said that Sahara has been able to arrange the money for Roy's release, who will be out of jail before the court's summer recess. However, nothing has happened so far.

Creditor Bank of China has put Grosvenor House hotel on after Sahara defaulted on the loans, which the group attributed to certain "technical breaches". (See: Bank of China takes control of Sahara's Grosvenor House to recover loans)

The iconic hotel property, Grosvenor House, is estimated to be worth over Rs5,000 crore. Bank of China had financed Sahara nearly $900 million for its hotel acquisitions and is now selling it to reclaim its loan.

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

The hotel is being "treated under default" because Bank of China has declared "an event of default" on the US loans due to some "technical breaches" in the financial covenants, it had said.

Grosvenor House, a landmark property on Park Lane in London that was designed by reknowned architect Sir Edwin Lutyens, and purchased by Sahara Group in 2010 for $726 million (Sahara India Pariwar buys London's Grosvenor House Hotel for Rs3,275 crore).