US investment firm Kennedy Wilson seeks Shelbourne Hotel loans for €111m

Beverly Hills firm hints at asset flotation

Kennedy Wilson

Holdings, the Californian investment firm, has said it is close to taking control of the historic

Shelbourne Hotel

in Dublin and hinted that it may put some of its Irish property assets into a publicly listed vehicle.


The Beverly Hills firm said in a January 6th filing with the US Securities and Exchange Commission that it had signed a contract for the “potential purchase” of notes secured by the Shelbourne Hotel property in Dublin for a price of approximately $152 million (€111 million).

Anglo Irish Bank, later renamed Irish Bank Resolution Corporation (IBRC), and Bank of Ireland initially leant €103 million each to a consortium of Irish businessman to buy the hotel in 2004 and refurbish it. The group was led by builder Bernard McNamara, now a bankrupt, as well as John Sweeney, Bernard Doyle, Jerry O'Reilly and David Courtney.

Shelbourne Hotel Holdings Ltd, which owns the hotel, had total debts of €289 million at the end of 2011, including trading losses and borrowings associated with acquiring a luxury apartment in New York.

Kennedy Wilson said it anticipated financing the purchase of the Shelbourne through a mixture of its own cash, debt and "potentially in part with third-party equity".

The Shelbourne hosted US first lady Michelle Obama and her daughters during their stay in Dublin last year.

Kennedy Wilson said in its SEC filing that it had acquired 300,000 sq ft of commercial properties in Ireland since September 30th, 2013, during a period when the company spent $700 million on property deals in Europe and the US.

In a note, Kennedy Wilson also hinted at its future plans for its purchases. "We are currently considering potential capital-raising opportunities in Europe, which may include transactions through a publicly listed vehicle, private funds or separate accounts," it said.

It said it may invest between $100 million and $150 million of its own funds in any such vehicle. “Any such vehicle could also potentially be given priority access to deals sourced by us in Europe, which could limit our ability to make future investments in Europe other than through such vehicle,” it added. “There can be no assurances that we will complete any such transactions or make any such investment.”

Kennedy Wilson declined to comment beyond its SEC filing. (Additional reporting Bloomberg)