Sahara's Grosvenor House hotel in London put up for sale

Mumbai: London's landmark Grosvenor House hotel has been put up for sale after its owner, part of troubled Indian conglomerate Sahara, which has been trying to raise funds for its jailed boss Subrata Roy, was placed into administration by creditors.

Consultant Deloitte said on Tuesday it had been appointed administrator of Sahara Grosvenor House Hospitality Ltd, which owns the long leasehold title to the hotel. Property consultant Jones Lang LaSalle (JLL) will advise on the sale.

Sahara, which has been trying to raise $1.6 billion to free Roy by refinancing overseas hotels including Grosvenor House and New York's Plaza, said the administrator was hired after Bank of China's loan on the London hotel was declared in default.

"However, this action by the administrator does not preclude us to keep working on the refinancing transaction but now we would have to proceed with refinancing transaction with the consent of the administrator which we will be taking," it said.

Sahara said the administrator would give "the control back to the Sahara directors", after it gets the loan refinanced, which it said would be done soon.

The 494-room Grosvenor House hotel, operated by Marriott International Inc, is expected to fetch in a sale more than the 470 million pounds ($722 million) Sahara paid for it in 2010.

"We will be approaching investors in the Middle East, Asia and the US where the major sources of outbound capital are currently sitting," Mark Wynne-Smith, global CEO of JLL's hospitality and hotels group, told Reuters.

"These types of assets don't appear in the market very frequently so when they do clearly there is a lot of interest and excitement about the fact that it might change hands."

Sahara, whose assets stretch from a Formula One team to TV channels, bought the central London hotel in 2010 and was in talks to refinance it along with two other overseas hotels to raise money to bail Roy.

Roy has been held in a New Delhi jail for about a year after his company failed to comply with a court order to refund billions of dollars to investors in outlawed bonds.

Roy needs to post $1.6 billion in bail — the largest ever set in India — and Sahara has made several, failed attempts to raise the money by mortgaging its overseas assets.

In its latest attempt, it was close to finalising a deal with US-based investor Mirach Capital to raise money by taking a loan against its overseas hotels, but talks fell through.