JURYS INNS Group has shrugged off the credit squeeze and subdued conditions in the hotels sector by announcing a £60 million (€70 million) fundraising and a major expansion plan for the UK and mainland Europe.
The fundraising completed last week was sourced from Jurys Inns’ existing owners Quinlan Private and the Oman Investment Fund as well as from the group’s existing bankers.
Jurys raised £15 million each from Quinlan Private and Oman Investment under existing cash call agreements with those shareholders that gives Jurys the ability to draw down additional capital.
The remaining £30 million was sourced from Jurys’ existing syndicate of banks, which includes Anglo Irish Bank, AIB and Ulster Bank.
Jurys chief executive John Brennan described current trading conditions as challenging in the hotels market but said the fundraising represented a vote of confidence in the business and its growth plans.
Cormac Ó Tighearnaigh, the chief financial officer of Jurys Inns, said the funds raised would “improve the group’s finances, help us continue our planned investment and allow us to look at new development opportunities in key markets such as London”.
Jurys plans to open its first hotel on mainland Europe in Prague in September and has earmarked several sites in the UK, where it has already opened five new hotels this year, in Sheffield, Watford, Exeter, Swindon and Derby.
It will add Aberdeen to its two existing Scottish hotels in September and a further four UK hotels in Portsmouth, Glasgow, Newcastle and Bradford are due to open in 2010. The group then plans to focus on the steady and lucrative London market ahead of the 2012 Olympics.
Jurys’ focus on the lower end of the hotels market means it has not suffered as much as luxury chains, as consumers responded to recession by downgrading to lower-budget accommodation and opting for “staycations” in their home countries.
Boosted by the capital injection, the hotels group now plans to exploit depressed property markets either on a freehold or leasehold basis. It also plans to refurbish a number of its UK and Ireland hotels, spending up to €6 million on an upgrade programme. Two Dublin hotels, Christchurch and Custom House Quay, and its Manchester hotel will be the first to be refurbished.
The opening of the Prague and Aberdeen hotels in the autumn will take the number of Jurys’ hotels to 30 and bring its total number of rooms to almost 7,000. The company employs almost 2,000 people.
Established in 1993, Jurys Inns was bought by financier Derek Quinlan and a group of investors through his corporate vehicle Quinlan Private for €1.16 billion in 2007 – a deal that marked the pinnacle of the Irish commercial property boom. Oman Investment, which is controlled by the sultanate of Oman, took a 50 per cent stake last year.
Earlier this month, it was announced that Mr Quinlan, one of the most aggressive investors in the property boom, is to step down as chairman and partner of Quinlan Private.
During the peak of the market, Quinlan made a series of investments in the UK hotels sector apart from Jurys, including investments in the Marriott hotel group and the Savoy hotel group.
The sharp decline in property values has turned the investment firm’s focus from new acquisitions to refinancing completed transactions and the development of existing properties.
