The embattled Indian financial services group Sahara India Pariwar is leveraging its stake in The Plaza Hotel, Dream Downtown, and London’s Grosvenor Hotel to help pay the $1.6 billion bail of its jailed founder, Subrata Roy.
The company will raise $1.05 billion from Mirach Capital Group by mortgaging the three hotels, $400 million of which will go to paying off the current mortgage owed to Bank of China, Bloomberg News reported.
Roy’s problems stem from convertible debt issued by Sahara without getting the approval of India’s capital markets regulator. He was arrested in Feb. 2014 and has been in judicial custody since. As part of this deal, the Indian government has agreed to move him to house arrest.
Executives at Sahara have been trying to convince the court that the company complied with an order to refund 240 billion rupees to 30 million depositors. To date, those attempts have not been successful.
Sahara bought its stake in the Plaza from the Elad Group for $600 million in 2012. Kingdom Holding Co., controlled by Saudi billionaire Prince Alwaleed bin Talal, also owns a 25 percent stake in the property. [Bloomberg News] — Tess Hofmann