Sahara eyes $1 billion US hedge funds to rescue Subrata Roy

The Sahara Group is believed to be working on a $1-billion-plus debt refinancing deal with two American hedge funds for raising funds to secure release of its jailed chief Subrata Roy, according to a media report.

The two funds would become financiers for over $1 billion (Rs 6,000 crore) of debt against Sahara's three overseas hotels - the iconic Grosvenor House in London and two hotels in New York (the Plaza and Dream Downtown) - the Sunday Times reported.

The report said that the deal could have been struck last week itself after months of talks, but a Sahara Group spokesperson told news agency PTI in reply to queries in this regard that "all we can say in this matter is that the news is absolutely wrong".

"You can well understand our inability to comment on any issue pertaining to the deal of properties because of the operation of a non-disclosure agreement (NDA). Furthermore, you are definitely aware of the fact that how strictly NDA is followed and honoured particularly in the overseas market," the spokesperson said in an emailed reply without elaborating further.

Roy was jailed in March amid a long-running dispute of Sahara with the Securities and Exchange Board of India (Sebi) over repayment of billions of dollars to investors who were sold certain bonds. Sahara, however, has maintained that it has repaid over 93 per cent of the investors.

The Sahara chief was earlier trying to sell the hotels from his makeshift office in Tihar Jail but could not strike a deal within a Supreme Court deadline on the use of a conference room in the prison for the purpose of the sale.

The American consortium was advised by the law firm Brown Rudnick and fronted by Johnny Sandelson, the property entrepreneur whose buy-to-let hotel company GuestInvest went bust during the financial crisis.

A source close to the US hedge funds told the paper that their aim is to take control of the hotels adding, "Everyone's got wider ambitions." Earlier this month, the apex court declined to give an urgent hearing to Roy's plea seeking bail to attend the cremation and perform rituals relating to the death of his aunt.