Indian High Court Bars Plaza Hotel Sale
Al Barbarino Nov. 26, 2013, 11:04 a.m.
Sahara India Pariwar won’t be selling The Plaza Hotel or any of its other assets any time soon after all.
The Supreme Court of India issued an order on Friday that prohibits the firm from selling any of its assets — not to mention Sahara chairman Subrata Roy and two other company directors can’t leave the country without permission, according to the New York Post, which had previously reported that the sale was likely.
The ruling comes just days after Sahara, as reported in The Commercial Observer, denied rumors and reports that it was looking to unload The Plaza, as well as the Dream Downtown and the Grosvenor House in London.
“I would like to take this opportunity to set the record straight. Sahara is not looking to divest itself of these important assets at this time,” Mr. Roy wrote.
“This speculation has arisen because we have received offers, but that does not mean we have any intention of selling. We view these properties as investments in our future and plan on developing them further with our partners in each location.”
Multiple overseas publications, including India’sDealCurry, had reported that the assets were up for sale earlier this month, and later the Post claimed that a $1.6 billion offer from an unidentified Mideast group was on the table for some portion of the firm’s assets.
Indian securities regulators are clamping down on the firm, claiming it sold $4.8 billion in bonds in violation of national laws, and Bank of China seeks the $1 billion in loans it fronted for the three properties; in 2012, the court ordered Sahara to refund the money to investors and last August ordered the company to turn over certain property title deeds as collateral, according to the Post.
The Indian bond ordeal was stirring before the firm scooped up the storied Plaza, however, and when the firm purchased a controlling stake in the property last year many hoped the cash-rich firm would quell Elad Properties’ not-so-smooth condo conversion of parts of the property.
The conversion reduced the number of guest rooms from 800 to 280, and left some buyers, who had paid up to $50 million for their homes, questioning the quality of the renovations. But by most accounts the hotel is still operating smoothly and the downsize of hotel rooms if anything is viewed favorably, hotel insiders told The Commercial Observer.