India's Sahara gets more time to raise bail to free boss (updated)

Sahara Housingfina

23/03/2015 12:55

(Adds details from the court hearing) 
    By Aditi Shah and Sumeet Chatterjee 
    NEW DELHI/MUMBAI, March 23 (Reuters) - India's Sahara, a 
sprawling conglomerate that ranges from media  to property and 
Formula One motor racing, on Monday got three more months from 
the country's highest court to come up with a proposal to raise 
$1.6 billion to free its chief from jail. 
    Subrata Roy has been held in jail for more than a year after 
Sahara failed to comply with a court order to refund billions of 
dollars to investors in a bond programme that was ruled illegal. 
Sahara has made several failed attempts to raise the bail money. 
    The Supreme Court last week gave Sahara  SAHR.BO  SAHM.BO  a 
final chance to raise funds in order to bail Roy out. It had 
said it could ask a receiver to auction its assets, which 
includes New York's Plaza hotel and tracts of land in India, if 
it failed to do so. 
    On Monday, the court accepted Sahara's plea for more time 
after the firm said it was exploring various options including 
selling a part of its Aamby Valley township outside Mumbai, 
which has luxury villas and a golf course, to raise funds. 
    A Sahara lawyer told the court that the company has received 
a line of credit worth 900 million euros ($980 million) from 
Spain's BBVA  BBVA.MC  bank, which will be used to replace a 
loan from Bank of China tied to its three overseas hotels, which 
include Grosvenor House in London.  
    BBVA did not make immediate comment. 
    Earlier this month, Grosvenor House was put up for sale 
after the Bank of China loan was declared in default. 
    Sahara has an outstanding debt of $852 million from the 
bank, the company lawyer told the court. 
    The court also granted Sahara permission to sell 10 more 
properties across the country, in addition to the nine it is 
already permitted to sell, to raise funds 
    The court allowed Roy to use a makeshift office inside New 
Delhi's Tihar Jail premises, with facilities such as computers, 
Internet and phones for three months to finalise the deals. 
    Real estate experts say a fire sale of properties may not 
raise enough to free Roy and get Sahara back on its feet. 
    "If you ask people if this is the best time to sell 
high-value assets in the country, the majority of them would say 
no," Sanjay Dutt, head of property consultant Cushman and 
Wakefield in India, told Reuters before the court hearing. 
    "With this kind of investment, somebody has to be very 
ambitious in every sense of the word." 
     
    RACE FOR CASH 
    Roy, the company's founder, styles himself "managing worker" 
and guardian of the world's largest family. Several employees 
said operations across the group had been hit over the past year 
without him.  ID:nL4N0VY3DH  
    He built the group from a standing start with just 2,000 
rupees and a Lambretta scooter in the late 1970s, but later 
could draw the country's prime minister, state chief ministers, 
actors and cricketers to his extravagant parties. 
    He is not only the face of the conglomerate, but also 
single-handedly controls an operation spread across dozens of 
tiny subsidiaries in India, Mauritius and Britain, several 
employees said. 
    The huge $1.6-billion bail requirement is a product of the 
cost of the bond programme, estimated by regulators to be as 
much as $7 billion. Sahara has said it has paid most of the dues 
to the bondholders. India's markets regulator disputes that. 
    In a surprise move, a lawyer who claimed to represent 
U.S.-based Mirach Capital Group told the court that the investor 
was willing to buy all three of Sahara's overseas hotels. 
    Supreme Court judge T.S. Thakur told the lawyer Mirach might 
only get a chance of buying if and when a court receiver was 
appointed to auction Sahara properties. 
    In its last attempt, Sahara was close to finalising a deal 
with Mirach to raise money by taking a loan against its overseas 
hotels, but talks collapsed after Reuters reported that a bank 
letter underpinning a proposed deal was forged.  ID:nL4N0VM60Z  
 
 (Additional reporting by Suchitra Mohanty in NEW DELHI and 
Jesús Aguado in MADRID; Editing by Ian Geoghegan and Will 
Waterman) 
 ((sumeet.chatterjee@thomsonreuters.com; +91-22-61807068; 
Reuters Messaging: 
sumeet.chatterjee.thomsonreuters.com@reuters.net)) 
 
Keywords: INDIA SAHARA/