(MENAFN- Gulf Times) A syndicate of five UK and US investors who have come to the rescue of embattled Sahara group chief Subrata Roy with a $2bn loan offer hope to clinch the deal by February 20.
The investment by Mirach Capital Group, which has been specially formed for the execution of the deal, "is not into the Sahara Group, but a loan against the hospitality properties," its CEO Saransh Sharma said.
"The loan may also represent the opportunity for acquisition, in the event Sahara is not able to repay the debt," said US-based Sharma, who is currently in India.
"The properties represent marquee assets valued far beyond the $2bn loan. The negative attention around Subrata Roy's trials has distressed these assets, and Mirach sees a valued opportunity to potentially acquire them at a discount," he said.
Roy has been held in New Delhi's Tihar Jail for more than 10 months over Sahara's failure to comply with a court order to refund billions of dollars invested in outlawed bonds.
The Supreme Court, which last year asked Sahara to pay $1.6bn to release Roy on bail, this month authorised the group to raise funds by remortgaging its overseas hotels.
With the special permission of the court, Roy has been trying to raise the money by negotiating from jail the sale of properties.
These include the Plaza Hotel in New York, the Grosvenor House Hotel in London, Sahara Star in Mumbai and Aamby Valley resorts in Maharashtra.
"Let's say they somehow manage to make the interest payments, what is the probability of them coming up for the principal? The answer is slim to none in my opinion," Sharma said. Mirach Capital was set up specifically for the Sahara transaction, he said.
"It is an indirect way to take over these assets and not just take over these assets, to take over these assets at a valuation which would be discounted to the true market value."
Sahara said earlier this month that it was in talks with Mirach Capital, which says unidentified wealthy families in the US and Britain are among its investors, hoping to raise the fund by remortgaging for one year its three overseas hotels.
Sahara is confident of meeting its repayment obligations to lenders using hotels earnings, its head of corporate finance Sandeep Wadhwa said. He added Sahara was in the process of seeking transaction approval from the Reserve Bank of India.
Sharma, who said the talks with Sahara are exclusive and that he has visited Roy in jail nine times, said the amount for Sahara transaction was already in an escrow bank account.
Besides the roughly $1.5bn loan against overseas hotels, Mirach Capital will also make a $450mn equity investment in two of Sahara's India properties, he said.
Mirach Capital Group is a special purpose vehicle representing a syndicate of five investors from the UK and the US, Sharma said.
It was specially formed for the execution of this deal, and represents this consortium of investors.
Sharma said he cannot disclose the names of the company's investors as it could potentially damage deal negotiations.
Mirach was currently in the process of completing definitive documents, he said. Upon completion and execution of required paperwork, the deal will be closed.
Given the multi-jurisdictional complexities of making a loan and investment in three countries across five properties, the transaction and its respective paperwork is quite complex, he said.
"Typically, a transaction this complex tends to take 90 to 180 days for completion.
"However, our attorneys are striving to complete this transaction within 30 days," he said anticipating the deal to be completed by February 20.
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