Mirach Capital confident it will get Sahara assets

An investment vehicle lining up a US$2 billion package to help bail out Sahara’s Subrata Roy has told Reuters it expects to ultimately take control of Sahara’s hotel assets, including New York’s Plaza and London’s Grosvenor House, after the conglomerate fails to repay lenders.

Saransh Sharma, a San Jose, California-based investor leading the rescue plan, told Reuters in an interview he doesn’t think Sahara will be able to pay off the more than US$1.5 billion it plans to borrow to cover bail terms for Roy, who has been held in a New Delhi 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.

Sharma said that will help his fund, Mirach Capital Group, take over the hotels at a bargain price. “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.

Sahara said earlier this month that it was in talks with Mirach Capital, which says unidentified wealthy families in the U.S. and Britain are among its investors, hoping to raise the fund by remortgaging for one year three of its hotels.

Sahara is confident of meeting its repayment obligations to lenders using hotels earnings, its head of corporate finance Sandeep Wadhwa told Reuters. 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 9 times, said the amount for Sahara transaction was already in an escrow bank account.