The Gulf state of Qatar has purchased the Plaza Hotel in New York from Subrata Roy’s Sahara India Parivar for a deal worth $600 million. The deal was made through Katara Hospitality, a hotel-centric subsidiary of Qatar’s sovereign wealth fund.

With this purchase, Qatar has added another star property to its name as it already owns landmark hotels such as The Savoy and The Connaught in London. The Plaza has changed ownership multiple times and was also owned by current U.S. President Donald Trump some twenty years ago.

The deal was first reported in Reuters on Tuesday.

News of the sale comes after three other bidding groups struggled to negotiate a deal with the Plaza’s majority owner, the Sahara India Parivar Group. The Real Deal reported last month that the Plaza’s minority owners, Ashkenazy Acquisition Corporation and Saudi Prince Alwaleed bin Talal’s Kingdom Holding, had been granted an extension to close on the purchase of the Plaza after going into contract in May.

But in a reversal, the minority group opted to drop its bid and sell the 25 percent stake along with Sahara’s 75 percent stake to Katara instead of another bidder because, sources said, the sovereign wealth fund subsidiary offered greater “certainty” of closing.

According to one source who has been in contact with Sahara on sale matters, Katara was able to convert the debt on the Plaza into equity for the Qatar company’s acquisition, in lieu of foreclosing on Sahara.

The pace of Qatar's overseas investment had seen a slow down amid a crisis in the Gulf after its neighbours - Saudi Arabia, the United Arab Emirates, Egypt and Bahrain - imposed economic sanctions on Doha for allegedly supporting terrorism. But in recent months has said the impact of the boycott has been mitigated, allowing it to resume large scale investments abroad, including buying a stake in Russian oil major Rosneft.

The Plaza Hotel deal is the largest investment in the Western property market by Qatar since the start of the blockade in June last year.

However the real-estate deal is not without its hiccups -- United Capital Real Estate Development filed a lawsuit against Subrata Roy, claiming they breached a contract by seeking other buyers for the Plaza Hotel, according to Arabian Business. United also has alleged in a complaint filed in New York state court on June 22 that Roy and Sahara U.S. fraudulently encouraged United to sign deals, show proof of funds and place money in escrow. United is seeking $1 billion in damages along with interest and attorney costs for the claims.

This deal comes even as embattled Sahara group has said it is confident of getting out of long-running financial constraints by the next fiscal and will regain a key position as an Indian conglomerate by entering several new businesses.

(The above story first appeared on LatestLY on Jul 04, 2018 10:47 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).