Barclay brothers buy out Maybourne debt from NAMA

Ireland’s bad bank, NAMA (National Asset Management Agency), has sold more than €800 million (US$1.1 billion) of debt held by Maybourne Hotel Ltd., owner of three London landmark hotels, to David and Frederick Barclay, according to several published reports today.

The transaction gives the Barclays virtual control of the iconic portfolio, which includes Claridge’s, the Berkeley and Connaught, as they now own 100% of the debt and 64% of the equity, according to sources close to the deal. Sources added that the deal included credit positions that controlled the equity held by investor Derek Quinlan.

NAMA recovered 100% of the original value of the loans plus interest. “it is not a surprise this debt was sold at par, given the quality of the Maybourne assets and their on-going upside potential through further development and the underlying strength of the London hotel market,” said Arthur de Haast, global CEO for Jones Lang LaSalle Hotels.

The remaining equity is still held by Paddy McKillen, who acquired the hotels in 2005 with Quinlan and will be looking for fair value for his remaining interest.

“It is open warfare. With the company £200 million (US$313 million) over-leveraged, McKillen is in a tough situation dealing with the Barclays,” a source told HOTELS. “He has an illiquid position in a company he doesn’t control. Until now, he has been holding out for a big price from them.”

The Barclay twins, two 76-year-old Scottish brothers, also own Britain’s Daily Telegraph and the 5-star Ritz hotel in London.

Claridge's, London. Photo used courtesy of Claridge's
Claridge’s, London. Photo used courtesy of Claridge’s