Sebi to sell 4,700 acres of Sahara land, raise Rs6,500 cr
30 May 2016
Capital market regulator Securities and Exchange Board of India (Sebi) is reported to have authorised HDFC Realty and SBI Capital to sell about 4,700 acres of Sahara India property. The sale of the freehold property, spread across 60 land parcels in 14 states in India, expected to fetch around Rs6,500 crore.
A report in The Times of India today said that the Sebi move is in keeping with the Supreme Court's 29 March directive to initiate the process of selling 87 "unencumbered" properties of the Sahara group.
These land parcels are located in various states, including Uttarakhand, Madhya Pradesh, Rajasthan, Uttar Pradesh, Bihar, Chhatisgarh, Kerala, Jharkhand, West Bengal, Andhra Pradesh, Assam, Gujarat and Tamil Nadu and include agricultural land as well as residential, commercial and industrial properties.
The proceeds will be used to generate part of the bail amount (Rs5,000 crore in bank guarantee) for Subrata Roy who has already furnished Rs5,000 crore of the Rs10,000 crore bail money.
According to the report, the properties proposed to be sold form only a fraction of Sahara's total landed assets of 33,633 acres in the country, of which Amby Valley alone accounts for 10,600 acres while another 1,000 acres are spread across Uttar Pradesh.
Market analysts, however, say that most of these assets could be entangled in a web of litigation and this could thwart Sebi's recovery efforts. Also, it would be near difficult for Sebi to find buyers for these properties as Sahara has become synonymous with financial fraud and duping of investors.
That could also be the reason why the why Sahara has been able to sell only about 550 acres and raise about Rs2,733 crore over the last two years despite the group's desperate attempts to sell various properties.
In a similar case involving liquor baron Vijay Mallya's Kingfisher House failed to evince buyers' interest for a building with a built-up area of over 17,000 sq ft located in plush Vile Parle area near Mumbai's domestic airport?.
Lenders are now stuck with Rs9,000 crore worth dues from the billionaire's defunct airline Kingfisher Airlines for the last few months but have failed to get any bids.
Sahara's properties now on the block are mostly in the rural areas and are agricultural land, which will make sale all the more difficult. Selling its overseas assets - Grosvenor House in London and The Plaza and the Dream Hotel Downtown - have been a lengthy painful task for the group. It is after two years of negotiations, that the group told the court in March that it has sold Grosvenor House to Qatar. (Sahara also told court that it is in talks to refinance its loans on its other two New York hotels.)
Also a slowdown in the real estate sector and government's anti-black money campaigns make property sale even more difficult.