Sahara row: Lenders put iconic UK Grosvenor House on sale
4 March 2015 12:11 AM GMT
Grosvenor House, a landmark property on Park Lane here that was designed by acclaimed architect Sir Edwin Lutyens of New Delhi, is one of the three marquee hotels owned by Sahara outside India —the other two being Plaza and Dream Downtown in New York.
Sahara has been trying for months to raise funds to secure release of its chief Subrata Roy, as also that of two other senior officials, from Tihar Jail in Delhi, where they have been lodged for one year. These three hotels have been at the centre of these fund-raising plans.
Sahara was in talks with US-based Mirach Capital for a syndicate loan arrangement linked to the three properties to replace an existing loan from Bank of China, but the deal fell apart and the two parties warned each other of legal action.
While there were no immediate comments from Sahara on the development regarding Grosvenor House, which is being managed by JW Marriott and has 494 bedrooms including 74 suites, realty consultant Jones Lang LaSalle said in a statement that it has been appointed the sole agent to sell this property.
Deloitte was appointed administrators to Sahara last night after “it defaulted on debts tied to the hotel”, according to a report in Daily Telegraph, which said that the Grosvenor House may fetch about 500 million British pounds (approximately Rs 5,000 crore).
This is more than 470 million British pounds that Sahara Grosvenor House Hospitality Ltd had paid in 2010 for London’s largest luxury hotel.
Sahara Group had acquired the three iconic hotels in London and New York between 2010-2012 at an estimated valuation of USD 1.55 billion. Market experts, however, peg their current valuation at upwards of USD 2.2 billion, after taking into account the appreciation in their values. The group has been engaged in a legal battle with Indian markets regulator Sebi for a long time over repayment of investor dues totalling over Rs 20,000 crore. Sahara, however, claims it has already repaid 95 per cent of the investors directly.
JLL Hotels and Hospitality Group said it has been appointed “the sole agent to market the JW Marriott Grosvenor House Hotel on behalf of the Administrators and the LPA Receivers.”
Under the UK’s Law of Property Act, the LPA Receiver is a person or a company who is appointed to take charge of a mortgaged property when the borrower has defaulted with an aim to to either sell the property or to collect a rental income for the lender.
Sahara’s purchase of this luxury five-star hotel in 2010 was the largest hotel transaction in London at that time.
In 1929, the hotel was built on the site of Grosvenor House, the former London residence of the Dukes of Westminster, whose family name is Grosvenor.
Marriott is expected to continue to manage the hotel even after the sale.
Sahara mulls loan refinance to get back hotel control
Sahara on Tuesday said it is working on a refinancing transaction to repay the loans to Bank of China and regain control of Grosvenor House. The group said that the London 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. The loan on Sahara’s three hotels — Grosvenor House, The Plaza and Dream Downtown in New York — from Bank of China is “cross collateralised and cross guaranteed”.
Bank of China put the London hotel under “administration” on Monday for recovery of its loans, while Deloitte and realty consultant JLL have been mandated to find a buyer for it.
Sahara has been trying for months to raise funds to secure release of its chief Subrata Roy, as also that of two other senior officials, from Tihar Jail in Delhi, where they have been lodged for one year. These three hotels have been at the centre of these fund-raising plans.
Sahara was in talks with US-based Mirach Capital for a syndicate loan arrangement linked to the three properties to replace an existing loan from Bank of China, but the deal fell apart and the two parties warned each other of legal action.
While there were no immediate comments from Sahara on the development regarding Grosvenor House, which is being managed by JW Marriott and has 494 bedrooms including 74 suites, realty consultant Jones Lang LaSalle said in a statement that it has been appointed the sole agent to sell this property.
Deloitte was appointed administrators to Sahara last night after “it defaulted on debts tied to the hotel”, according to a report in Daily Telegraph, which said that the Grosvenor House may fetch about 500 million British pounds (approximately Rs 5,000 crore).
This is more than 470 million British pounds that Sahara Grosvenor House Hospitality Ltd had paid in 2010 for London’s largest luxury hotel.
Sahara Group had acquired the three iconic hotels in London and New York between 2010-2012 at an estimated valuation of USD 1.55 billion. Market experts, however, peg their current valuation at upwards of USD 2.2 billion, after taking into account the appreciation in their values. The group has been engaged in a legal battle with Indian markets regulator Sebi for a long time over repayment of investor dues totalling over Rs 20,000 crore. Sahara, however, claims it has already repaid 95 per cent of the investors directly.
JLL Hotels and Hospitality Group said it has been appointed “the sole agent to market the JW Marriott Grosvenor House Hotel on behalf of the Administrators and the LPA Receivers.”
Under the UK’s Law of Property Act, the LPA Receiver is a person or a company who is appointed to take charge of a mortgaged property when the borrower has defaulted with an aim to to either sell the property or to collect a rental income for the lender.
Sahara’s purchase of this luxury five-star hotel in 2010 was the largest hotel transaction in London at that time.
In 1929, the hotel was built on the site of Grosvenor House, the former London residence of the Dukes of Westminster, whose family name is Grosvenor.
Marriott is expected to continue to manage the hotel even after the sale.
Sahara mulls loan refinance to get back hotel control
Sahara on Tuesday said it is working on a refinancing transaction to repay the loans to Bank of China and regain control of Grosvenor House. The group said that the London 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. The loan on Sahara’s three hotels — Grosvenor House, The Plaza and Dream Downtown in New York — from Bank of China is “cross collateralised and cross guaranteed”.
Bank of China put the London hotel under “administration” on Monday for recovery of its loans, while Deloitte and realty consultant JLL have been mandated to find a buyer for it.
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