The intention is to hire about 10 client service managers initially. Typically, they will meet debtors in their homes and formulate a proposal to help them address their debt problems.
Ironically, many of the these managers will be former bankers. It’s a funny old world.
Boost for McKillen in Maybourne saga
It has been a good week for Paddy McKillen, who appears to have fought the Barclay brothers to something of a standstill at the Maybourne Hotel Group.
The key breakthrough seems to have been winning the approval of his main banker, Irish Bank Resolution Corporation, to in effect take on further borrowings from his Qatari partners to fund his share of the coming rights issue at the hotel group and preserve his interest. McKillen’s share of the rights issue will be in the region of €62 million.
Convincing IBRC to allow a weakening of its security of this magnitude could have been no easy feat given the bank is in rundown mode and given the general antagonism towards the notion that it would continue banking property developers.
IBRC has always argued that it has more to gain in the long run by supporting McKillen in his battle to retain control of the hotels, but one suspects that it was the substantial inroads McKillen has made into reducing his exposure to the bank that tipped the balance.
McKillen’s spokeswoman said last night that he had cut his corporate borrowings from IBRC from €600 million to
€550 million. This has been achieved by refinancing many of his assets, and another €200 million is due to be sliced off his loans shortly. His personal borrowings have also be reduced to less than €260 million from a reported €300 million.
However, despite this week’s events, stalemate will most likely ensue at the group post the rights issue, with McKillen owning 37 per cent while the Barclays own 28 per cent and have control over Derek Quinlan’s 36 per cent.
How the deadlock will be broken is unclear but McKillen’s best bet is that Quinlan’s financial difficulties finally overwhelm him.
If he is forced to sell his shares, then pre-emption rights kick in and McKillen – with further support form the Qataris and IBRC’s blessing – should be able to take his stake to 56 per cent.
However, the Barclays will still remain significant minority shareholders at 44 per cent and, given recent events, it is hard to see them kissing and making up with McKillen. As a result the company risks being damaged by continued boardroom warfare.
The most likely outcome is that one or other party will move to buy the other out at that point. Perhaps the real question in all of this is why – given the events of last week – they don’t start that process now.
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