Subrata Roy has no funds to bail himself out but Sahara is bidding for Grosvenor again

Do we call it the never-say-die spirit of jailbird Subrata Roy? The Sahara group is making another attempt to buy London’s Grosvenor House, a hotel which it had lost control of after it defaulted on loans taken to buy it earlier. The move comes at a time when the group boss Subrata Roy is cooling his heels in Tihar jail as he has not been able to give the Rs 10,000 crore bail amount. He has been in prison for the last 14 months in a contempt of court case involving a refund of Rs 24,000 crore to investors. [caption id=“attachment_2264656” align=“alignleft” width=“380”]  Subrata Roy[/caption] According to a report in The Economic Times today, the group is bidding for the hotel through its subsidiary, Amby Valley Mauritius and has in fact emerged as one of the top bidders. Among the bidders are Constellation Hotels Holding, M&G Prudential, Abu Dhabi Investment Authority and China’s Fosun Group and bids are valued up to Rs 6,150 crore. The move is surprising as it gives rise to a pertinent question: Where is the group getting the confidence from? More importantly, where will it get the funds from in case it succeeds in the bid? Remember, Sahara has been running from pillar to post to raise Rs 10,000 crore to bail out its boss. A report in the Mumbai Mirror, though had earlier said Sahara has been able to arrange the money and will be out of the jail before the court’s summer recess. However, nothing has yet happened on this front. Bank of China had put Grosvenor House hotel on sale in March 2015 after Sahara defaulted on the loans, which the group attributed to certain “technical breaches”. The group had then said that it is 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 acclaimed architect Sir Edwin Luytens of New Delhi, was purchased by Sahara in 2010 for $726 million. It had later bought two more hotels, The Plaza and Dream Downtown, in New York. The loan to buy all the three hotels was taken from Bank of China and was “cross collateralised and cross guaranteed”. Earlier reports said Bank of China Deloitte and realty consultant JLL have been mandated to find a buyer for Grosevenor House. Will Roy be able to purchase the hotel again? The ET report quotes unnamed sources as saying that it is unlikely that the group will get enough funds to buy it back. But if it indeed does, then the whole Sahara saga would see a fresh twist. There will definitely be more unanswered questions about the fund flow into the group. Interesting, indeed. With inputs from PTI