Sahara's Subrata Roy an acquirer of assets, not seller, says Mirach's Saransh

As the deal between Miami-based Mirach Capital Group and Sahara Group over the acquisition of The Plaza and Dream Downtown in New York and the Grosvenor House in London gets bitter, the US firm’s founder Saransh Sharma said that the Sahara boss is not very keen to sell company’s trophy assets.

“In our experience, there is a great deal of pride and ego at play here. Mr. Roy, in our opinion, is an acquirer of assets, not a seller. In our short engagement in this deal, we have offered a fair structure and a win/win solution for Mr. Roy, the Honorable Supreme Court of India and our investors,” Sharma told Business Standard’s N Sundaresha Subramanian in an exclusive interview.

The Mirach Capital Group chief did not agree that his firm had to do anything with the deal not working out smoothly.

“At the center of the collapse of the deal was Sahara’s unwillingness to part with these trophy assets. My public comments regarding our strategy in acquiring these assets – following a likely default – seems to have rattled the Sahara group. While initially amenable to accepting a loan, the fear of Mirach’s strategy seems to have materialized, along with the realization that they did not have the liquidity to make the first interest payment. They unknowingly approached members of our syndicate while shopping for a new deal, thereby breaching our contract,” Sharma said. ( Read the full interview here )

However, in the latest development Mirach today said it has returned the entire due diligence fees of $2.625 million to Sahara but is willing to make a $2.05 billion offer for full buyout of their three iconic hotels.

In a statement, Mirach said it has remitted $2.625 million to the Sebi-Sahara Fund, while ending the proposed loan to Sahara Group, which involved transfer of loans taken by Saharas from Bank of China for its three overseas hotels to a new syndicate of investors.

“Under a 10 December 2014 agreement with Sahara, Mirach Capital Group was entitled to fees related to legal, accounting and transaction related costs to be paid by Sahara,” it said, adding that it has returned the money to “wipe the slate clean” in the wake of “unfounded allegations” levelled against it.

“Though incurring expenses to date of $1,075,000 in related closing costs, Mirach has remitted the full amount back to Sahara, in an effort to show the Supreme Court of India the group stands willing to incur costs while waiting for a fair ruling on 20 February,” Mirach said.

Meanwhile, the Supreme Court today directed the Sahara group to submit a fresh plan for raising funds against its hotels abroad after negotiations with Mirach Capital headed nowhere. The Indian group is in dire need of money to bail out jailed Roy but is struggling to gather the amount.

The apex court had fixed 20 February as the deadline for the deal to go through. “The allegations Sahara is making against Mirach (regarding an allegedly forged letter from Bank of America on bank gurantee) are likely an effort to buy time, when no time is needed. Mirach, along with the Honorable Supreme Court of India and the world at large, is ready to see an end to this saga. Mirach and its investors stand ready, willing, and able to do just that: by completing a sale of these assets, and thereby facilitating a return of the money to the creditors of Sahara,” Sharma told Business Standard .

The Mirach Capital alleged that Roy " is awaiting a sweetheart deal: a complete bailout package–no liens, very few security documents in place, over 2-3 years to pay the money back, with very low interest rates".