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04-09-2012, 10:22 AM #1
Subrata Roy set to buy 85% stake in Sant Singh Chatwal's New York hotel Dream Dowtown
Sahara India Pariwar chairman Subrata Roy is poised to clinch a Rs 445-crore deal to acquire Indian-American hotelier Sant Singh Chatwal's flagship property Dream Dowtown Hotel in New York. Reliable sources said that Roy has made a formal offer for acquiring 85 per cent stake in the hotel, which is valued at $100 million.
The Chatwal Group is expected to retain the remaining 15 per cent share in the hotel. The investment is being made through Sahara Group's subsidiary Aamby Valley Ltd, which is registered in Mauritius. The negotiations are reported to be at an advanced stage and a final deal is expected to come through by month-end. The existing franchise agreement with the famous Wyndham Hotel Group to run Dream Downtown will continue to remain in place even after Roy takes over the hotel.
Located between two of the most vibrant neighbourhoods in New York, the avant-garde, lifestyle hotel offers 315 rooms, an expansive rooftop lounge, a beach club and extensive fitness facilities with spa services. The property also has a retail facility and food and beverages facilities attached to it which will be run on a 50 per cent profit-sharing basis with the Chatwal Group, which also runs a global chain of restaurants.
The Sahara Group, which also runs the five-star hotel Sahara Star, near the Mumbai Airport, is stepping up investments in the hospitality sector. It had hit the headlines with the acquisition of the London's landmark hotel Grosvenor House for $726 million in 2010. The group had also placed an unsuccessful bid for the Marriott chain of hotels in the UK but Roy had indicated at the time that their bid was low and they may not get it.
With friend Mulayam Singh's Samajwadi Party bouncing back to power in Uttar Pradesh, Roy's political clout is also on the rise. New York-based Chatwal Hotels & Resorts is looking to expand in India with initial investments of Rs 2,000 crore and plans to operate around 100 hotels in the country in the next 10 years in partnership with international hospitality major Wyndham Hotel Group. The money from the sale of the New York hotel could be invested in India.
Chatwal, during his recent visit to India, had said that in the next five years, his group has a definite plan to operate 52 hotels in the country and invest Rs 2,000 crore for developing infrastructure.
Chatwal Hotels, which has given the franchise and management rights of its five-star deluxe brand Dream and fourstar brand Night to Wyndham Hotel Group, plans to expand them in India through the franchise model and develop them with the help of local partners.
Chatwal, who has a big network in the US, had run into a controversy in India when his name was shortlisted for the Padma Bhushan awards in 2010 in the non-resident Indians list.