BUSINESS & FINANCE
Sahara group reaches deal to sell iconic Plaza hotel for $600 mn: report
Two investors have struck a deal to buy a majority stake in the iconic Plaza Hotel in the US for USD 600 million, in which the embattled Sahara Group led by Subrata Roy Sahara owns a 70 per cent stake, a media report has said.
The report in the New York Times said that Shahal Khan, founder of the Dubai-based family office White City Ventures, and Kamran Hakim of the Hakim Organization, a major New York City landlord, have reached a deal to buy a majority share of the Plaza Hotel for USD 600 million.
The deal is scheduled to close on June 25, it said.
Sandeep Wadhwa, head of corporate finance at the Sahara Group, which owns a 70 per cent stake in the hotel, and Sant Singh Chatwal, a hotelier who owns the other five per cent being sold, confirmed the deal, the report said.
Both men declined to comment further, citing confidentiality agreements, it said.
The Sahara Group had been trying for a long time to sell the property, and last year, it hired brokerage firm Jones Lang LaSalle to carry out an auction of the property.
Roy, chairman of the Sahara Group, and Chatwal had bought their shared stake in the hotel in 2012.
"The latest deal follows a string of reported sales that never came to fruition, though this time the buyers have made a USD 30 million deposit that they would forfeit if they backed out, making a completed sale more likely," the report said.
The Plaza Hotel, opened in 1907, is a city landmark and the only hotel listed on the National Register of Historic Places. The hotel was once owned by Donald Trump, who lost it in a bankruptcy.
The report added that the deal is "complicated" by the fact that a partnership of the Ashkenazy Acquisition Corp, a real-estate firm, and Kingdom Holdings, which is controlled by the Saudi Prince Alwaleed bin Talel, owns the remaining 25 per cent of the Plaza.
While the partners have the right of first refusal to buy the hotel at the same valuation, that right is set to expire sometime in the next week.
While a deal has been reached to sell the majority stake, the NYT report said that the transaction is complex.
The USD 600 million purchase price includes the refinancing of a more than USD 410 million mortgage on the hotel.
Qatari Sheikh Hamad bin Jassim bin Jaber Al Thani holds the mortgage, which is set to mature in early July.
In 2010, Sahara had purchased the Grosvenor House, a historic hotel in London.
Last year, Ashkenazy Acquisition, with financing from Al Thani, acquired that hotel. As part of that deal, the Qatari Sheikh took over the mortgage on the Plaza.
Roy was arrested in 2014 after evading for two days a non-bailable warrant issued by the Supreme Court for his failure to appear before it in a case of non-refund of Rs 20,000 crore to investors.
Roy has spent almost two years in jail. He is on parole since May 2016. The parole was granted the first time to enable him attend the funeral of his mother. It has been extended since then.
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