Poonawala throws in hat for Sahara's Grosvenor House, but says no to bidding war

Pune-based billionaire father-son duo of Cyrus and Adar Poonawalla, an investor group linked to the Qatari royal family and the Sultan Hassanal Bolkiah of Brunei are locked in the race to buy one of the prized overseas assets of the Sahara group - the Grosvenor House Hotel in London, the Economic Times reported today.

The Poonawalla group , that is estimated to be worthover $1-billion,is in sectors ranging from horse breeding to a pharmaceutical company that supplies drugs to 137 countries.According to a Forbes estimate in March this year, Cyrus Poonawalla, chairman of the Group, has a net worth of $5.2 Billion and is the 10th richest man in India.

[caption id=“attachment_91783” align=“alignleft” width=“380”] ![Dr. Cyrus Poonawalla with Paris Hilton at the amfAR [American Foundation for AIDS Research] event in Cannes, on May 22, 2014.](https://images.firstpost.com/wp-content/uploads/2014/07/poonawala.jpg) Dr. Cyrus Poonawalla with Paris Hilton at the amfAR [American Foundation for AIDS Research] event in Cannes, on May 22, 2014.[/caption]According to the report, the Poonawallas, have made a an offer of 550 million to the Sahara Group for the Grosvenor House hotel, a 650,000-sq ft iconic property located in London’s upscale Mayfair neighbourhood, thereby valuing it at 19 times EBITDA multiple. However, the family known for their race horses, sports cars, private jets and Sharon Stone charity events, are not willing to enter into a bidding war and over leverage themselves just to acquire the trophy asset.

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The Supreme Court has granted the Sahara group permission to sell its three overseas properties - the Plaza in New York, London’s Grosvenor House and Dream Downtown, another upscale hotel in New York- to raise a portion of Rs 10,000 crore to be given as bail for Subrata Roy. However, Roy willonly be given a six-hour window a day, under police custody, to negotiate the deal.

The stake sell is part of the group’s effort to raise money to clear its Rs 37,000-crore repayment obligation on its controversial convertible debentures.

As per the valuations presented in court, the three hotels together can fetch Rs 5,000 crore,which may be utilised in full or inpart towards the margin money necessary for obtaining thebank guarantee.

While the Grosvenor House is valued at Rs 6,366 crore, the Plaza Hotel in New York can fecth Rs 3,683 crore and the Dreams Downtown Hotel Rs 14,616 crore.

The apex court also ruled that the sale of the offshore properties shall not be at a price lesser than the value estimated by CBRE and JLL for the said properties, reduced at the most by five percent of such value. In other words, the sale of the offshore properties must at least be at 95% of the value estimated by the consultants.

These hotels could be Sahara’s best “get out of jail " card, as the court has already rejected his attempts to pay the bail in instalments or move him from Tihar jail to house arrest.

In 2012, Sahara paid $575 million for the controlling share of Plaza, and $726 million for Grosvenor House in 2010. Roy bought the Dream Downtown Hotel for $220 million in late 2012.

The sale from the proceeds will be adjusted against loan from Bank of China and then funds would be sent to Sebi. Any remaining funds would be put into the groups’ accounts.