Paddy McKillen has successfully bid to acquire his personal loans of €300m from IBRC, the former Anglo Irish Bank.
Mr McKillen was backed in his bid by Colony Capital, a private investment firm led by Tom Barrack. As part of the deal Colony refinance on a long term basis loans secured in part on the Northern Ireland developer's 36.2 per cent stake in Coroin, the company which owns and manages luxury London hotels Claridge's, The Connaught and The Berkeley.
"I am delighted to have agreed to a long-term funding agreement with Colony Capital that puts the emergency liquidation of IBRC saga behind us," McKillen said in a statement. "I remain the largest shareholder in Coroin and today's deal takes my stake in the hotels firmly out of the reach of the Barclay Brothers who will now not be able to succeed with the hostile take-over of the hotels they launched over three years ago."
“I could not be more excited about having a partner like Colony and Tom Barrack as I continue the exciting process of consolidating my property holdings under a robust, remade balance sheet. I am especially keen to bolster my ongoing efforts to take rightful control of Coroin and finish the development job to which I committed so many years ago - and to avoid an unjust outcome whereby those treasured assets continue to be neglected, or worse are sold separately and the group broken up.”
Mr Barrack, who was formerly involved in the hotels prior to their sale to a consortium led by financier Derek Quinlan and including Mr McKillen said he was pleased the deal was finally done. , "The key to discovering great mispricing opportunities is not found in assets but rather is found in great partners. Paddy McKillen is an esteemed real estate professional, a first class partner, and above all a superb human being," he said.
" Joining forces with him is a real-time example of how leverage-related resolutions need to proceed in Europe, not with foreclosures and value dissipation, but through collaboration with best of class borrowers on a holistic basis across all lending relationships as a lynchpin for economic recovery in the region." Barrack described the hotels as "the three jewels of London." "Colony was the proud owner of the Savoy Group for many years," he said. "We remain intimately familiar with these hotels and did not hesitate to jump at the opportunity to renew our association once again."
Mr McKillen said he planned to continue his fight with the billionaire Barclay brothers for outright control of the hotels. The Barclays own a 28 per cent stake in Coroin and control Mr Quinlan’s 35.8 per cent share-holding since they purchased his debt and made an arrangement with Mr Quinlan to buy his stake over three years ago.
Mr McKillen said this arrangement cannot be completed because under the the terms of the shareholder’s agreement, he has the right of first refusal once a current shareholder seeks to dispose of shares.
Commenting on the Barclay brothers’ position McKillen said, “The Barclays have spent an enormous amount of money on the 28 per cent stake in Coroin they acquired by circumventing the shareholder’s agreement. They cannot do that again. Their current arrangement with Quinlan is unsustainable. Several months ago I offered to buy their stake in Coroin and that offer remains on the table. They cannot continue to support Derek Quinlan indefinitely and their banks will not continue to finance a take-over that cannot succeed.”
“It is over three years since they launched this outrageous attack. I have strongly defended my position against all of their underhanded tactics and they have now backed themselves into a corner with nowhere to go”.
