Sahara eyes hedge fund support to secure Subrata Roy's release: report

London: Sahara group is believed to be working on an over USD 1 billion debt refinancing deal with two American hedge funds for raising funds to secure release           of its jailed chief Subrata Roy, stated a media report . The two funds would become financiers for over USD 1 billion (Rs 6,000 crore) of debt against the group's three overseas hotels, including the iconic Grosvenor House in  London and two hotels in New York (the Plaza and Dream Downtown), the Sunday Times reported.         

The newspaper report said that the deal could have been struck last week itself after months of talks, but a Sahara group spokesperson in reply to queries in this regard that "all we can say in this matter is that the news iabsolutely 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 group with the capital markets regulator SEBI (Securities and Exchange Board of India) over repayment of billions of dollars to investors who were sold certain bonds. Sahara group, however, has maintained that it has repaid over 93 per cent of the investors. Roy was earlier trying to sell the hotels from his makeshift office in India's largest prison but could not strike a deal within a Supreme Court deadline on the use of a Tihar Jail conference room 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. Roy was advised by the law firm Milbank. A source close to the US hedge funds told the paper that their aim was to take control of the hotels, adding, "Everyone's got wider ambitions". Earlier this month, the Supreme Court declined to give an urgent hearing to the plea of jailed Sahara chief Roy seeking bail to attend the cremation and perform rituals relating to the death of his aunt.