Sahara avoids forced sale of London landmark Grosvenor House

PUBLISHED : Wednesday, 10 June, 2015, 1:00am
UPDATED : Wednesday, 10 June, 2015, 1:00am

Troubled Indian conglomerate Sahara India Pariwar said it had averted the forced sale of London's landmark Grosvenor House hotel by its creditors, thanks to a last-minute deal with Britain's billionaire Reuben brothers.

Sahara, which also owns the Plaza Hotel in New York, bought the Grosvenor in 2010. But it has since slid into a legal quagmire, after bonds it sold to millions of small investors were found to be illegal.

The company's boss and founder has been in jail since March last year, and Sahara has been struggling with a string of deals to raise US$1.6 billion in bail.

Grosvenor House was placed in administration and put up for sale in March, after a loan to Sahara from Bank of China backed by the property operated by Marriott International was declared in default.

Sahara on Sunday said the Reuben brothers were in the "final stage" of taking over the loan portfolio from the Bank of China.

"The deal restores Sahara's ability to renegotiate the loan terms with the new lender, or with third parties," it said.

Sahara gave no further details, citing the need to protect continuing negotiations.

Representatives for the Reuben brothers were not available for comment on Sunday.

David and Simon Reuben built their fortune with Russian aluminium company Trans-World Metals, but later sold out and put their money into private equity and property.

The Reubens are rarely in the public eye despite holding one of Britain's largest fortunes. They rank 80th on the Forbes list of the world's richest people last year, with an estimated wealth of US$13.7 billion.

The two were born in Mumbai but made their fortune from London, where Simon went into property and his older brother David started trading in scrap metal.

India's capital markets regulator and the Supreme Court have estimated Sahara owes as much as US$7 billion to bond investors, but Sahara says it has repaid 95 per cent of the amount due.