18 ARCs in race for stressed loans of Sahara Hospitality: Report

As many as 18 asset reconstruction companies (ARCs) have submitted expressions of interest (EoIs) to acquire the ₹1,728.58 crore stressed loan exposure of Sahara Hospitality Ltd, currently held by a consortium of banks led by Union Bank of India, Business Standard reported, citing sources familiar with the development.

Interested ARCs include prominent players such as Asset Reconstruction Company (India) Ltd (ARCIL), Phoenix ARC, JM Financial ARC, and Edelweiss ARC. The due diligence period has been extended until May 20, after which binding bids will be invited.

The consortium also includes UCO Bank, Bank of Baroda, Central Bank of India, IDBI Bank, and Karnataka Bank. While the principal outstanding across lenders stands at ₹2,426.8 crore, the amount being offered for sale totals ₹1,728.58 crore, inclusive of accrued interest.

Sahara Hospitality owns and operates the Sahara Star Hotel, a five-star property adjacent to Mumbai’s domestic airport. The hotel features over 400 rooms, five restaurants, and six banquet halls with a combined capacity of up to 4,500 guests. BoB Capital Markets is advising the lenders on the sale process.

Initially, the banks considered selling the exposure to the government-backed National Asset Reconstruction Company Ltd (NARCL), but rejected the bid as too low. They then opted for an open auction to discover a fair market price.

Following due diligence, binding bids will be called, and the lenders plan to identify an anchor bidder whose offer will serve as the benchmark for a Swiss Challenge Auction. Notably, no reserve price has been set, and lenders have mandated a 100% cash transaction.

The insolvency proceedings against the hotel were briefly initiated in November 2023 by KTR Management Services but were later quashed by the NCLAT in March due to a pre-existing dispute.

Earlier, Sahara Hospitality escaped a similar insolvency petition filed Delta Electro Mechanical Private Ltd for defaulting on a payment of Rs 51.77 crore. In that case the insolvency application was been withdrawn by Delta Electro Mechanical Private Ltd. under Section 12A of the Insolvency and Bankruptcy Code (IBC).

The two parties had decided to settle the issue after Sahara Hospitality agreed to pay a sum of Rs 8 crore in three instalments as full and final settlement of all its outstanding dues as on the date of signing of the consent terms.

Also See: Sahara Hospitality escapes insolvency proceedings by paying Rs 8 cr to creditor