Irish developer McKillen lodges money to protect stake in three luxury London hotels
Property developer Patrick McKillen has lodged the funds necessary to ensure that his stake in three luxury London hotels is not diluted in a rights issue pressed by the billionaire Barclay brothers to be held next week. Last night a spokesman for Mr McKillen, who is the largest shareholder in the Maybourne Hotel Group, said the lodgement would guarantee that he “remains the largest shareholder” in the company, with 36.4 per cent of it.
The group, which owns the Berkeley, Claridge’s and the Connaught hotels, has been at the centre of a two-year battle between Belfast-born Mr McKillen and the Barclays, who own the Daily Telegraph and the Ritz Hotel.
Funds in place
Mr McKillen has also said he had the funds “in place” to take up any of the shares in the Coroin rights issue allocated for financier Derek Quinlan, who owns 35.2 per cent of the shares should Mr Quinlan be unable to raise the funds required to participate.
The rights issue was opposed by Mr McKillen, who has argued, it is understood, that loans were available on preferable terms from Qatari investors to fund the company’s £660 million debt, but he was outvoted at a Coroin board meeting.
Under the deal, private-equity investors Blackstone will lend £450 million to the company, while the outstanding sum will come from shareholders.
However, it is clear that the Barclays had hoped Mr McKillen would have been unable to raise the funds.
The existing debt is held by the Barclay brothers through one of their many firms, Maybourne Finance Limited, backed by a temporary loan from Barclays Bank, which it has wanted to end.
The one-year bridging loan given by the corporate banking division of Barclays was due to have been repaid in September, though it was rolled over.
The Barclays bought the debt last year from the National Asset Management Agency in the face of strong protests from Mr McKillen. However, he lost a High Court case in London challenging the sale in July.
Mr McKillen’s participation in the rights issue, it is believed, will have needed approval from the Irish Bank Resolution Corporation.
He owes IBRC €300 million in personal debt and a further €1.3 billion in companies controlled by him.
Mr Quinlan’s participation will also require IBRC approval, since he is also one of its major debtors.