The Plaza and Dream Downtown hotels’ owners now have a legally binding reason to deny the properties are for sale — India’s Supreme Court has barred them from unloading any of conglomerate Sahara India Pariwar’s assets.
The New Delhi court issued the order on Friday, and further rocked Sahara chairman Subrata Roy and two other company directors by forbidding them to leave the country without permission.
Sahara, based in the city of Lucknow, was founded in 1978. It has vast holdings in financial services, Bollywood, media, real estate and hospitality, among other interests.
Last November, it bought a 70 percent stake in the Plaza from Elad for $600 million and full ownership of the Dream Downtown from Sant Singh Chatwal’s Hampshire Hotel Management for $200 million.
The stunning judicial ruling was the latest twist in a struggle between Sahara and SEBI, India’s equivalent of the Securities and Exchange Commission, over a $4.8 billion bond sale by two of its real-estate units in 2008. The regulators said the offering had violated securities laws.
In 2012, the high court ordered Sahara to refund the money to investors. After Sahara repeatedly stalled, the court last August ordered the company to turn over certain property title deeds as collateral.
Then, last week, the justices accused Sahara of playing “hide and seek” by turning over a deed for a 106-acre parcel in Versova, a western suburb, which Sahara valued at about $3.9 billion — but which regulators valued at a mere $2.3 million because the land lies in a zone where development is not permitted.
The court set the next hearing for Dec. 11. But its order not to sell assets would seem to render moot, for the moment, the possibility of any hotel sales.
Indian media have widely reported that Roy had quietly put the New York properties on the block along with London’s Grosvenor House, which Sahara bought in 2010 for $726 million. The reports said Roy was entertaining a $1.6 billion offer from an Arab company.
We noted last week that a sale offering could raise questions about Hampshire’s future roles at the 315-room Dream Downtown, which it continues to manage, and at the 280-room, Fairmont-managed Plaza, where Chatwal’s company was recently tapped to oversee the Plaza’s under-utilized Oak Room, Palm Court and other restaurant spaces. (The Plaza Hotel now constitutes only a portion of the landmark building where many former guest rooms were converted to luxury condos.)
Manhattan hotel brokers and analysts told us they knew of the sale discussions, and one insider said certain key executives “are worried about getting the axe” in the event of a deal.
Sahara last week strenuously denied any sale talks at all, claiming it had received an unsolicited offer for Grosvenor House only and that the hotels were not for sale.
In a statement, Roy said, “Sahara is not looking to divest itself of these important assets at this time… We view these properties as investments in our future and plan on developing them further with our partners in each location.”
But Sahara was slower to respond to the court’s ruling, declining to comment over the weekend and on Monday. On Tuesday, Sahara announced in a newspaper advertisement in India that it would hand over new title deeds to satisfy the court’s demands “instead of debating any further on the issue raised.”
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Procter & Gamble Hair Care is breezing over from Rockefeller Center to SL Green’s 120 W. 45th St., aka Tower 45. The beauty products unit signed a 10-year lease of 10,093 square feet on the entire third floor. The asking rent was $55 a square foot.
Different Jones Lang LaSalle teams repped the tenant and the landlord. SLG Executive Vice President Steve Durels noted that leasing activity has been “robust” since a recently completed capital improvement program.
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Sterling Entertainment has taken 38,776 square feet at 1271 Sixth Ave., representing the final sublease piece out of a total 180,000 square feet which a Newmark Grubb Knight Frank team was marketing.
NGKF’s David Falk, Neil Goldmacher, Peter Shimkin, Brian Goldman and Daniel Madison previously brought in subtenants HedgeServe, Complex Media, Sandow Media and Quest Workspaces. CBRE’s Scott Gottlieb, Ken Meyerson and Dan Wilpon repped Sterling.