McKillen is called on to take part in rights issue
Published 22/12/2011 | 05:00
The Barclay brothers, among the wealthiest businessmen in Britain, have called on Irish developer Paddy McKillen to participate in a rights issue to put the Maybourne Hotel business -- which owns Claridges -- back on an "even keel''.
Speaking through a spokesman, they told the Irish Independent they were prepared to invest up to £200m (€240m) in the Maybourne hotel chain, which is co-owned with Mr McKillen, and this would mean the chain wouldn't have to sell off one of its three hotels to reduce debt.
"We would be willing to subscribe up to £200m and in that way, the group wouldn't have to sell any of its hotels,'' said the spokesman. "Mr McKillen has every opportunity to participate in the rights issue,'' the spokesman added.
The Barclays, who own the 'Telegraph' newspaper group and the Ritz Hotel, now control about 64pc of the Maybourne hotel group (known as Coroin Ltd), with Mr McKillen holding 36pc. Mr McKillen has claimed his minority interests are being suppressed and the Barclays are involved in a "corporate raid''.
The two sides have clashed since NAMA earlier this year sold €800m of debt to Maybourne Finance, a company controlled by David and Frederick Barclay.
However, yesterday, a spokesman for the two billionaires said litigation by Mr McKillen was not good for the company as it created "uncertainty''. He said: "There is nothing unfair about a rights issue.''
He was speaking after a judgment in a London court which found that purchases by the Barclays earlier this year of a stake in Coroin Ltd, owned by Manchester businessman Peter Green, were not contrary to the shareholder agreement of Coroin and did not trigger other shareholder's pre-emption rights.
The Barclay Brothers spokesman welcomed the decision, but said there was still a "long way to go'' in litigation with Mr McKillen. "Nobody wants to litigate, but we are confident of our case."
He said as long as Mr McKillen wanted to take legal actions, the Barclays would respond to these -- we are happy to do so, we are assured of our
legal position''. He said the outcome over control of the group was "inevitable'', but nobody was contesting that Mr McKillen remained a 36pc shareholder and a board director.
He said the brothers' interests failed to understand Mr McKillen's strategy in relation to the loans held by the Maybourne business. He said NAMA did not want to hold the loans anymore and, according to logical outcome of Mr McKillen's arguments, these loans would simply revert back to NAMA.
"The issue is, how do you move a company forward that owns three lovely hotels. . . hotels like these need investment,'' said the spokesman.
The chain owns the Connaught hotel, the Berkeley hotel and Claridges. Several Irish business figures have been investors in the hotels over recent years including Derek Quinlan, Moya Doherty and John McColgan. The chain originally also included the Savoy hotel but this was sold soon after the chain was purchased in 2004.