McKillen has repaid Irish banks €400m in just a year
Developer still in fight for Claridge's
PADDY McKillen, the Belfast-born property investor and biggest single shareholder behind the famous Claridge's, Berkeley and Connaught hotels, has repaid an eye-watering €400m to IBRC and other Irish banks in the past year alone.
Speaking to the Sunday Independent at the end of a week in which he successfully fought off the latest challenge by the billionaire Barclay brothers for control of the London hotels, Mr McKillen vowed to repay every single cent he owes the state-owned IBRC over the next two years.
His bold declaration came less than 24 hours after he had stumped up €67.5m (£55m) to subscribe to a rights issue pushed by Sir David and Sir Frederick Barclay. Had Mr McKillen failed to come up with that money, his share in Coroin – the company behind the three hotels – would have been diluted from 36 to 25 per cent, making it virtually impossible for him to gain majority control in the future.
Asked about the rights issue, he said: "I've proved all the negative people wrong by coming up with the money. It's so important to maintain my position, so we did everything in our power to get the funds, which we did."
Commenting on the position of the Barclay brothers on the current cash call which closes at 5pm tomorrow, Mr McKillen said: "The money is available to take up the Barclays' stake too if they don't subscribe. But I think they've been pushing this from day one."
In the case of the hotels' other major shareholder, Derek Quinlan, a report in yesterday's Irish Times suggested money has been loaned to him by the Barclay brothers to enable his participation in the rights issue. Had the former financier been unable to find the cash, Mr McKillen had offered to take up any of the shares allocated to him.
Asked for comment on the speculation that he didn't have the financial muscle to take on the Barclays, Mr McKillen said: "There's no doubt about it, there's been negative press against us. I think we've clearly proved them wrong."
Addressing allegations in the media and in political circles here that he enjoys a "cosy" relationship with IBRC, Mr McKillen said: "All I can say is my relationship with the IBRC is professional. I'm one of their largest borrowers. They're very intent on getting their debt repaid. I am giving them 100 per cent of their money back. In the space of 12 months we will have our debt with IBRC reduced by €400m at 100c in the euro. We have a clear plan to repay the IBRC 100 per cent over the next couple of years."
Responding to suggestions that he was effectively being supported by the Irish taxpayer by virtue of his debt to IBRC, he said: "When we borrowed the money from Anglo Irish Bank it was a commercial public bank. Through no fault of mine, it ended up being nationalised. The goalposts have changed in that they want the debt paid back in a much faster time period than the one I had agreed with the old Anglo, but I accept that times have changed and I've agreed a timely repayment.
"Luckily for us, we had invested in quality assets that are very saleable and can be refinanced. IBRC are happy too that we have those assets and that they're going to get 100 per cent of that money."
Commenting on the efforts by the Barclay brothers to buy his debt from IBRC, he said: "They've consistently lobbied IBRC to purchase my loans so they could call them in and put me in grave danger. But they only cherry-picked. The offers weren't full offers. We have a consensual relationship with the IBRC where we have continued to pay them 100c in the euro. Why would they risk upsetting that deal to sell a portion of my loans? It was a no-brainer to stick with me. Why would they sell to my enemy?"
Asked about his future intentions for Claridge's, the Berkeley and Connaught hotels, he said: "I've no interest in selling out in the short term. The proposed deal I have is for another 15 years. When we bought the hotels, the big complaint was the linen was so threadbare there were holes in it. The recent BBC programme on Claridge's shows the condition the hotels are in now. They're three of the best hotels in the world. I intend to stay involved with them for a long time. There's still a lot to be done."