The Supreme Court has delayed its verdict on troubled conglomerate Sahara’s bid to refinance a key loan and raise fresh debt to fund at least $1.6 billion, or Rs 10,000 crore, in bail needed to release its jailed boss.
Sahara chairman Subrata Roy, one of India’s best known and most flamboyant entrepreneurs, has been held in a New Delhi jail for more than nine months in Sahara’s long-running dispute with the Securities and Exchange Board of India (Sebi).
The watchdog says Sahara, a giant conglomerate with nearly a million employees and agents, has failed to repay billions of dollars it raised in bonds which were later ruled to be illegal.
At a hearing on Wednesday, the Supreme Court said it was trying to establish whether the proposed new debt would violate rules on how Indian companies can raise money abroad.
The court will hear the case next on January 9, judges said. No official order was posted on the court’s website.
Keshav Mohan, a lawyer defending Sahara on the case, said separately, however, that the group had been given a go ahead to raise second mortgages on its three overseas hotels and to refinance a Bank of China loan.
It was not clear why he differed from the court’s pronouncement. Mohan could not be reached for further comment.
Sahara, which already has a more than $900 million loan from Bank of China, has sought the court’s permission to take over that loan and refinance it from another creditor, raising a fresh $650 million (Rs 4134.65 crore at 1 dollar = 63.61 rupees).
Sahara’s total liability has been estimated at up to $7.4 billion by the regulator. The Supreme Court has demanded it pay $1.6 billion initially before it grants bail to 66-year-old Mr Roy.
The group has so far failed in its efforts to sell its hotels, including New York’s Plaza and Grosvenor House in London. The court has barred Sahara from selling the hotels at a discount of more than 5 per cent to market value.