ROYAL BANK of Scotland may take a stake in Jurys Inn as part of a debt-for-equity swap in which the hotelier’s lenders will write down as much as £250 million (€300 million) of borrowings, said two people with knowledge of the matter.
RBS, AIB and Irish Bank Resolution Corporation (IBRC), Jurys’ largest lender, are weighing three plans to restructure the hotel chain’s £650 million of debt, said the people, who declined to be identified because the matter is private.
IBRC and AIB do not plan to take a stake as part of the refinancing, they said.
Jurys’ owners, Oman Investment Fund, an investment arm of the Sultanate of Oman, and Avestus Capital Partners, a Dublin-based private-equity firm formed by former Irish tax inspector Derek Quinlan, may inject an additional £160 million into the company under one plan.
That figure may be reduced if RBS takes a stake.
A decision by the banks is expected within weeks.
Mr Quinlan led the takeover of Jurys Inn, the operator of 32 three-star hotels in Ireland, Britain and the Czech Republic, for €1.17 billion in June 2007, the height of the property bubble.
The purchase was initially an all-debt deal, including €400 million of a bridging loan as Mr Quinlan raised equity for the company.
Vesway, the holding company that owns Jurys Inn, wrote down the value of its fixed assets and goodwill by £436.6 million in 2010, pushing the company into a £461.6 million loss, according to sterling-denominated accounts filed in the Companies Registration Office in November.
Avestus, known as Quinlan Private at the time of the Jurys Inn purchase, sold a 50 per cent stake in Jurys to the Oman Investment Fund in 2008.
Jurys Inn’s lenders hired PricewaterhouseCoopers to advise on the restructuring. – (Bloomberg)