Narrative
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Project narrative
On November 26, 2012, the New York Branch of the Bank of China (BOC) entered into a $465,850,000 USD loan agreement with Sahara Plaza LLC and Sahara Dreams LLC — two Delaware-incorporated special purpose vehicles (SPVs) wholly-owned by Indian conglomerate Sahara India Pariwar (also known as the Sahara Group) — to finance its acquisition of The Plaza Hotel and The Dream Downtown Hotel. This loan was secured by (i.e. collateralized against) mortgages on The Plaza Hotel and The Dream Downtown Hotel charged by Sahara Plaza LLC and Sahara Dreams LLC to the London Branch of BOC. The loan included cross-collateralization and cross default arrangements, tied to BOC's 2010 £305 million GBP loan (Record ID#89605) to Sahara Grosvenor House Hospitality Ltd to facilitate the acquisition of Grosvenor House in London, United Kingdom. A default under the Plaza/Dreams Loan would constitute a cross default under the Grosvenor House Hotel loan, entitling BOC to enforce the securities granted under both loans. In the event of default under the Grosvenor House Hotel loan, subject to certain conditions, BOC was required to enforce its security over the assets securing the Grosvenor House Hotel loan before it would be entitled to enforce its security over Sahara's interests in Sahara Plaza LLC and Sahara Dreams LLC, and only if there remained debt owed to BOC as part of the Grosvenor House Hotel loan after the enforcement of the Grosvenor House Hotel securities. The proceeds were to supported the acquisition of stakes in the Plaza Hotel and Dream Downtown Hotel. The Plaza Hotel was a five star luxury hotel with 282 rooms and 152-privately owned condos located at 768 Fifth Avenue at the corner of Central Park in Manhattan, New York City, New York, and was famous due to the patronage of well-known guests and its film appearances. Opened in 1907, its owners of the years included future U.S. president Donald Trump and Saudi billionaire prince Al Waleed bin Talal Al Saud. The Dream Downtown Hotel was a 314-key luxury hotel located at 355 West 16th Street in the theatre district of Midtown Manhattan, New York City, New York. Sahara paid $575 million USD (£360 million GBP) for 50% of the Plaza Hotel, 100 of the condo-hotel units, and the retail portion the Plaza Hotel from retailer El Aid. Sahara paid $220 million USD from the Dream Downtown from American hotelier Vikram Chatwal. The acquisition was completed on November 26, 2012. In 2014, it was reported that Sahara was trying to sell the Plaza, Dream, and Grosvenor hotels to cover the $3 billion USD bail for its founder and chairman Subrata Roy, who had been in jail in New Delhi, India for a year because Sahara India Pariwar had failed to comply with a court order to refunding billions of dollars in outlawed bonds to investors. In early December 2014, it was reported that Mirach Capital Group (an company backed by investors and a wealthy Indian family) offered a one-year $1.6 billion USD loan to Sahara Group with an interest rate of 11%, with a portion around $900 million USD to be used to retire BOC debt on the three hotels and the remainder to pay the bail of Roy. Failure to repay would mean that Mirach would gain ownership of the three hotels. The loan had to close by February 20, 2015, which it failed to do and thus was not made. In 2014, Sahara Plaza LLC and Sahara Dreams LLC breached certain covenants in respect of their borrowings from BOC and fell into technical default. Because of the cross default and cross-collateralization arrangements between these companies, BOC, and Sahara Grosvenor House Hospitality Ltd, Sahara Grosvenor House Hospitality Ltd also went into default over its debt of BOC. In March 2015, Sahara Grosvenor House Hospitality was put into administration and Grosvenor House hotel was put up for sale. The Dream Hotel was also marketed for sale. In early June 2015, the Reuben Brothers Limited entered into a $800 million USD loan with Sahara to refinance the BOC loan for Plaza, Dream, and Grosvenor paying off the BOC loan and stopping the sale process of Dream.