Sahara, a sprawling conglomerate that ranges from media to property and Formula One motor racing, on Monday got three more months from the Supreme Court to come up with a proposal to raise $1.6 billion to free its chief from jail.
Subrata Roy has been held in jail for more than a year after Sahara failed to comply with a court order to refund billions of dollars to investors in a bond programme that was ruled illegal.
Sahara has made several failed attempts to raise the bail money.
The Supreme Court last week gave Sahara a final chance to raise funds in order to bail Roy out.
It had said it could ask a receiver to auction its assets, which includes New York's Plaza hotel and tracts of land in India, if it failed to do so.
On Monday, the court accepted Sahara's plea for more time after the firm said it was exploring various options including selling a part of its Aamby Valley township outside Mumbai, which has luxury villas and a golf course, to raise funds.
A Sahara lawyer told the court that the company has received a line of credit worth 900 million euros ($980 million) from Spain's BBVA bank, which will be used to replace a loan from Bank of China tied to its three overseas hotels, which include Grosvenor House in London. BBVA did not make immediate comment.
Earlier this month, Grosvenor House was put up for sale after the Bank of China loan was declared in default.
Sahara has an outstanding debt of $852 million from the bank, the company lawyer told the court.
The court also granted Sahara permission to sell 10 more properties across the country, in addition to the nine it is already permitted to sell, to raise funds
The court allowed Roy to use a makeshift office inside New Delhi's Tihar Jail premises, with facilities such as computers, Internet and phones for three months to finalise the deals.
Real estate experts say a fire sale of properties may not raise enough to free Roy and get Sahara back on its feet.
"If you ask people if this is the best time to sell high-value assets in the country, the majority of them would say no," Sanjay Dutt, head of property consultant Cushman and Wakefield in India, told Reuters before the court hearing.
"With this kind of investment, somebody has to be very ambitious in every sense of the word."
RACE FOR CASH
Roy, the company's founder, styles himself "managing worker" and guardian of the world's largest family.
Several employees said operations across the group had been hit over the past year without him.
He built the group from a standing start with just Rs 2,000 and a Lambretta scooter in the late 1970s, but later could draw the country's prime minister, state chief ministers, actors and cricketers to his extravagant parties.
He is not only the face of the conglomerate, but also single-handedly controls an operation spread across dozens of tiny subsidiaries in India, Mauritius and Britain, several employees said.
The huge $1.6-billion bail requirement is a product of the cost of the bond programme, estimated by regulators to be as much as $7 billion.
Sahara has said it has paid most of the dues to the bondholders. India's markets regulator disputes that.
In a surprise move, a lawyer who claimed to represent US-based Mirach Capital Group told the court that the investor was willing to buy all three of Sahara's overseas hotels. Supreme Court judge TS Thakur told the lawyer Mirach might only get a chance of buying if and when a court receiver was appointed to auction Sahara properties.
In its last attempt, Sahara was close to finalising a deal with Mirach to raise money by taking a loan against its overseas hotels, but talks collapsed after Reuters reported that a bank letter underpinning a proposed deal was forged.
(Additional reporting by Suchitra Mohanty in New Delhi and Jesús Aguado in Madrid)
