Sahara’s Plaza, Dream Downtown hotels in the USA up for sale?

The beleaguered Sahara group seems headed for a fresh blow with the mortgage holders of its prized overseas hotel assets reportedly readying a billion- dollar auction for the iconic Plaza and trendy Dream Downtown properties here next month. The group has been trying hard to raise funds including through refinancing of loans on these two hotels as also on the historic Grosvenor House property in London, to ensure release of its chief Subrata Roy from New Delhi’s Tihar Jail, where he has been lodged for over two years.

While there was no official word from Saharas, reports said that the two hotels can fetch up to $1 billion. Without identifying the source, a Bloomberg report said the “foreclosure auction” has been scheduled for April 26 by the billionaire brothers David and Simon Reuben, who had refinanced an earlier Bank of China loan of Indian group on its three foreign hotels.

It pegged total mortgage for the two US hotels at $500 million, saying they serve as collateral for the loan and were cross-collateralised with the Grosvenor House hotel in London. Another report in the New York Post quoted unnamed hotel industry insiders as saying the price could top $1 billion at the auction of Plaza and Dream Downtown.

Queries sent to the Sahara group, including about the trigger to the ‘foreclosure action’, remained unanswered. Reuben Brothers also didn’t reply to the queries. 

In March last year, Bank of China had put Grosvenor House under “administration” for recovery of its loans after the lender 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 in the UK and two prime hotels in New York — from Bank of China was “cross collateralized and cross guaranteed”. Sahara reached a $850 million refinancing deal with Reuben brothers and averted the ‘default-triggered’ sale of Grosvenor House hotel property.