PROPERTY DEVELOPER Paddy McKillen has insisted he remains the largest shareholder in the London Maybourne Hotels group, which owns some of the city’s most luxurious hotels, despite the £800 million sale of the group’s debt by Nama to the billionaire Barclay brothers.
A spokeswoman for Mr McKillen said last night: “Paddy McKillen is the largest shareholder with 36 per cent. Derek Quinlan remains the beneficial owner of 35 per cent and Misland owns the remaining shares.”
The Belfast-born developer, who is understood to have spent much of yesterday in meetings with lawyers, is considering a legal challenge to the decision by Nama to sell the hotels’ debt – its biggest single deal so far.
However, sources close to the Barclay brothers stood over declarations that the Barclays now control 62.8 per cent of Maybourne because they had bought mortgages on the properties taken out by financier Mr Quinlan.
Last January the Barclays bought control from Bank of Scotland – and not Aldar, the Abu Dhabi sovereign investment fund, as was understood on Thursday – of a Quinlan mortgage held on 22 per cent of Maybourne shares.
That deal brought the Barclays' to 50.4 per cent of Maybourne, but last Friday, sources told The Irish Times, it increased further when it bought the second of Mr Quinlan's mortgages from the Malaysian sovereign investment fund 1MDB, bringing its share to 62.8 per cent.
The share register of Coroin Ltd – the company that owns Maybourne – lists the Barclays as controlling a 62.8 per cent shareholding, even though Mr Quinlan is still listed as the beneficial owner of the shares he bought when Maybourne was taken over in 2005.
“It is like the mortgage on your house. You don’t own the house until the mortgage has been paid off,” one source said, pointing to the fact that Mr Quinlan relinquished his place on the Coroin board earlier this year.
Under Thursday’s deal with Nama, billionaire brothers David and Frederick Barclay, who already own the Ritz Hotel, paid full value, plus interest, for loans held by Nama on the hotel group, which owns the Connaught, Claridges and the Berkeley.
The directors appointed by Barclays to Coroin’s board, Richard Faber, Michael Seal and, more recently, Rigel Motte, together control 100 of the director votes.
Under Coroin’s articles of association, 100 votes are needed to pass any resolution at a board meeting. Mr McKillen controls 70, while a few are in the hands of others, the source said.
“The Barclays are in day-to-day control of the company and this was the situation before the Nama deal was agreed,” said the source. A spokesman for the Barclays refused to comment last night.
However, it is understood the purchase of the debt from Nama has strengthened the Barclays’ position since it cuts off any possibility of anyone else buying it and then foreclosing on the assets of the hotels group. Mr McKillen has doggedly refused to sell his 37.5 per cent stake to the Barclays, though the brothers have the legal right to first refusal under the company’s rules.
