Sahara group is believed to be working on an over US$1 billion debt refinancing deal with two American hedge funds backed by an undisclosed Wall Street bank to help secure the release of its jailed chief Subrata Roy, the Sunday Times reported. The debt will be secured against three of Sahara’s big hotel assets – the The Plaza and Dream Downtown in New York City and Grosvenor House in London.
The consortium was reportedly advised by Brown Rudnick, the U.S.-based law firm, and fronted by Johnny Sandelson, the UK- based property entrepreneur.
The Times reported that the deal could have been struck last week after months of talks, but a Sahara group spokesperson refused to comment on any issue pertaining to the deal of properties non-disclosure agreements.
Roy was jailed in March amid a long-running dispute of Sahara group with the capital markets regulator SEBI (Securities and Exchange Board of India) over repayment of billions of dollars to investors who were sold certain bonds.
Sahara group, however, has maintained that it has repaid over 93% of the investors.
Roy was earlier trying to sell the hotels from his makeshift office in India’s largest prison but could not strike a deal within a Supreme Court deadline on the use of a Tihar Jail conference room for the purpose of the sale.
A source close to the U.S. hedge funds told the Indian paper that their aim was to take control of the hotels, adding, “Everyone’s got wider ambitions.”