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Mysterious turn to Sahara’s $2-billion deal; BofA says not a banker

Crisis-ridden Saharas’ efforts to raise funds to secure bail for its chief Subrata Roy have taken a mysterious turn, with Bank of America refuting claims of it being the banker for a USD 2-billion financing package offered to the group by a US-based entity.

“We are in no way connected with this transaction,” a spokesperson for Bank of America Merrill Lynch told PTI.

The bank’s assertion follows a much-hyped deal announced by the group with a little-known entity named Mirach Capital of the US to raise funds for the release of Roy from Tihar Jail, where he has been lodged for almost a year now.

As per a Supreme Court order, dated January 9, Sahara lawyers placed before the bench “a communication dated January 5, 2015 addressed by Bank of America to Sahara India Pariwar, inter alia stating that under directions from Mirach Capital Group LLC, an amount of USD 1,050 million remains blocked and, earmarked till February 20, 2015 for the transactions being processed between Mirach and Sahara”.

Queries sent to Mirach, run by Indian-origin Saransh Sharma, and Saharas remained unanswered on this issue, but this entire funding arrangement has come under cloud with Bank of America denying any role in this deal.

Sources said that BofA came to know through media reports that its name was being mentioned in the court documents as a banker for the deal, following which it did the necessary due diligence that indicated possible forgery to involve its name in the case.

The letter placed before the court had further stated that Mirach had advised BofA to disburse USD 650 million out of the said unencumbered funds of USD 1,050 million, for junior loan transaction as agreed between Amby Valley (Mauritius) Limited and Mirach after execution of necessary legally binding definitive agreements.

“The letter further affirms that Mirach Capital Group LLC has advised Bank of America to disburse USD 400 million out of the said unencumbered funds of USD 1,050 million for the purpose of making an investment in Sahara Hospitality Ltd…”

These disbursements were said to be as per “offer letter” dated December 15 and issued by Mirach.

BofA was also said to be instructed by Mirach to unblock the entire funds of USD 1,050 million if the junior loan arrangement for USD 650 million and investment agreement of USD 400 million could not be executed by the end of business on February 20, 2015.

Earlier last month, Sahara Group’s Head of Corporate Finance Sandeep Wadhwa had said that documentation process was progressing and the deal with Mirach Capital was expected to be completed before February 20.

The said deal comprised of investments to the tune of USD 1.1 billion and a senior loan of close to USD 882 million having a one-year tenure.

The latter amount was to replace money borrowed from Bank of China related to Sahara Group’s three overseas hospitality properties.

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