RBS considers debt-for-equity swap in major restructuring of Jurys loans
Published 18/02/2012 | 05:00
ROYAL Bank of Scotland could be set to take a stake in iconic hotels group Jurys as lenders mull a major restructuring of the chain's £650m debt.
Two people close to the talks yesterday claimed that the RBS 'debt-for-equity' swap could form part of a wider deal that would see as much as £250m (€300m) of Jurys' debt written down.
AIB and Irish Bank Resolution Corporation (formerly Anglo Irish Bank) are also part of the talks but are not considering taking an equity stake in the group, the sources said.
Owned by four Irish families until 2007, Jurys is now owned by Derek Quinlan's former investment house Avestus Capital Partners and Oman Investment Fund.
Those owners may inject an additional £160m under one plan, the people said, though that figure may be reduced if RBS takes a stake.
A decision by the banks is expected within weeks.
Former tax inspector Mr Quinlan led the €1.17bn takeover of Jurys Inn in June 2007, when the chain encompassed 32 three-star hotels in Ireland, the UK and the Czech Republic.
The deal was done at the height of the property bubble and was initially an all-debt deal, including €400m of a bridging loan as Mr Quinlan raised equity for the company.
Weeks later, John Gallagher, who advised Jurys Doyle Hotel Group on the sale, said hotels were "incredibly highly valued".
Erfan Hussain, an RBS spokesman, Peter Fitzgerald, an IBRC spokesman, and Helen Leonard, an Allied Irish Banks spokeswoman, declined to comment. A spokesman for Jurys Inn, John Keilthy, also declined to comment.
Vesway Ltd, the holding company that owns Jurys Inn, wrote down the value of its fixed assets and goodwill by £436.6m in 2010, pushing the company into a £461.6m loss, according to sterling-denominated accounts filed in the Companies Office in November.
Avestus, known as Quinlan Private at the time of the Jurys Inn purchase, sold a 50pc stake in Jurys to the Oman Investment Fund in 2008. (Bloomberg)