McKillen refused leave to appeal Nama sale of £660m of hotel debt
Property developer Patrick McKillen has been refused permission by the UK Supreme Court to appeal the National Asset Management Agency’s sale of £660 million worth of debt held on three luxury London hotels to the billionaire Barclay brothers.
The judgment from three Supreme Court judges said Mr McKillen’s request for permission to appeal was turned down because “it does not raise an arguable point of law of general public importance which ought to be considered by the Supreme Court at this time”.
The brief ruling from Lord Walker, Lord Clarke and Lord Sumption, on Mr McKillen’s application against Nama and Maybourne Finance Ltd, said: “This is a one-off question of construction on unusual facts and foreign law.”
In June, the Court of Appeal ruled that Nama’s sale of the debt held on the Berkeley, Connaught and Claridge’s hotels was lawful, despite charges by the Belfast-born property developer that the action was illegal.
Last night, Maybourne finance director Phil Peters said: “We are pleased that Mr McKillen has been refused the right to appeal to the Supreme Court regarding MFL’s acquisition of Coroin’s debt from Nama. This decision confirms once again that the acquisition was entirely lawful and validates the original transaction between MFL and Nama.
“The ruling is the latest blow to Mr McKillen’s strategy of using costly legal action as a delaying tactic . . .”
Meanwhile, negotiations on a refinancing of the company’s debt, currently held by the Barclay brothers, are not complete. It is understood the Barclays have rolled over the debt – due to have been repaid in September – until the end of the year.
Investors Blackstone has agreed to lend £535 million to refinance Coroin, which would then be syndicated on to other lenders. However, it would mean that the shareholders – including Mr McKillen – would have to invest £145 million.
The Barclays have long insisted that Mr McKillen would be unable to invest in the company, let alone to the extent of the £50 million required by the proposed rights issue, which the Barclays appear determined to have pushed through by mid-December. However, Mr McKillen has insisted that he will take up his share of the new offer.
Financier Derek Quinlan still owns a 35.4 per cent stake in the hotel group – the swing share dividing Mr McKillen from the Barclays – although his shares are controlled by the Barclays on foot of an agreement last year. Mr Quinlan will have to get Nama’s permission to take part in the rights issue, even if the Barclays are buying the shares on his behalf. However, it is unlikely to want to see his shareholding diluted.