How the Irish big hitters stole crown jewels from the Arabs
Published 30/09/2011 | 05:00
A GROUP of Irish investors led by financier Derek Quinlan outbid a Saudi royal, Prince Alwaleed, to buy the Savoy Hotel Group in London, that includes the Savoy, Claridges, the Berkeley and the Connaught for €1.2bn.
The syndicate includes Riverdance duo John McColgan and Moya Doherty, property developer Paddy McKillen, Manchester retail tycoon Peter Green and Kyran McLaughlin of Davy Stockbrokers.
The group sell the Savoy Hotel to the Saudi prince and Bank of Scotland for €362m. This gave Quinlan and his fellow investors an almost 30pc return on their investment, with McColgan and Doherty reported to have received around €40m at that time.
They later sold their shares to Quinlan, McKillen, the Green family and McLaughlin when they left the syndicate. The hotel group is renamed the Maybourne, and the investors refinanced more than €600m of loans they took out to buy the hotels, striking a deal with Barclays Bank, Anglo Irish Bank and Bank of Ireland.
The group spend €347m on a lavish refurbishment and an extension at Claridges and the Berkeley.
Quinlan's consortium have ambitious global expansion plans, and were ready to spend up to €1bn to add hotels in places like Dubai, Paris, Moscow and New York to the Maybourne Group.
Quinlan steps down from Quinlan Private after 20 years and moves to Switzerland as the banking crisis puts pressure on developers as their properties, laden with massive debts, crash in value.
Maybourne Hotel Group now owes over €740m to Anglo and Bank of Ireland and fights to try to stop these loans being transferred into NAMA but they go to the bad bank.
While many property loans were acquired by NAMA at hefty discounts, sometimes of more than 50pc, given they were guaranteed against some of London's best hotels in prime locations it is likely NAMA paid almost the full amount for them.
NAMA moves against Quinlan and appoints a receiver to sell off his trophy assets, including homes in Shrewsbury Road and his art collection to pay down his €400m personal debts to the agency.
As part of this process, NAMA did a deal with a Malaysian sovereign fund and businessman Robert Tchenguiz to take over Quinlan's 22pc share of company for an estimated €60m.
Meanwhile, the Barclay Brothers crash the deal and buy a 28pc stake in the company by acquiring the shares owned by McLaughlin and the Green family, leaving McKillen as the only one of the original investors with a 36pc shareholding in the group.
Now NAMA has sold the loans for €800m, which it says is at a profit, also to the Barclays. This deal could put pressure on the biggest single shareholder, McKillen, who wants to remain an investor for the long-term, but the Barclays could yet pressure him to relinquish his stake.