David and Simon Reuben have take over the crisis-hit Indian group’s Bank of China loan for its three hotel properties thus averting a ‘default-triggered’ sale of the iconic Grosvenor House hotel in London.
When contacted, a Sahara group spokesperson confirmed that a “last-minute deal” has been negotiated with the Reuben brothers and the talks were in final stages, but did not comment on the deal size.
Reports have pegged the debt refinance deal at $850 million or Rs. 5,500 crore.
The Grosvenor House hotel was put on sale by its lender Bank of China earlier this year after a ‘technical default’.
Sahara Group has been trying to raise funds to secure release of its Chairman Subrata Roy, who has been lodged in Tihar Jail for over a year, through monetisation of its various assets, including the three overseas hotels.
When contacted, a Sahara group spokesperson said in a statement that the group has “successfully managed to avert the enforced sale of the Grosvenor House Hotel in London, one of the best-known iconic hotels in the world.
“A team led by Group Chairman has successfully negotiated a last-minute deal with the Reuben Brothers, who are now in the final stage of taking over the loan portfolio from the Bank of China. The other properties owned by the group are the New York Plaza hotel and the New York Dream hotel.”
Bank of China put Grosvenor House under “administration” early in March for recovery of its loans, while Deloitte and realty consultant JLL were mandated to find a buyer.
At that time, Sahara Group had said it was still working on a refinancing transaction to repay the loans to Bank of China and regain control of the iconic property.
Sahara had also said that the London hotel was 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. The loan on Sahara’s three hotels from Bank of China was “cross collateralized and cross guaranteed”.
Sahara’s refinancing arrangements involved getting a fresh loan for the three properties. A part of the proceeds would be given to Bank of China for release of Grosvenor House from “administration”, while the remainder could be deposited with Sebi to secure release of Roy and two other top officials from Tihar Jail.
Grosvenor House, a landmark property on Park Lane in London designed by acclaimed architect Sir Edwin Lutyens, was purchased by Sahara in 2010.
The two hotels in the U.S. were purchased later.
The three hotels were acquired between 2010—2012 at an estimated valuation of $1.55 billion.
