IBRC assessment of market for sale of loans includes McKillen’s €250m debt

PAMELA NEWENHAM

Special liquidators for the IBRC have written to debtors saying they have begun assessing the market for sale of the former Anglo Irish Bank’s loans, which include debts of €250 million owed by property investor Paddy McKillen.

The move has stepped up the battle for ownership rights over London’s most prestigious set of hotel properties up a notch, with twin billionaire brothers David and Frederick Barclay saying there are eager to buy Mr McKillen’s debts. The debts are secured against the Maybourne hotel group, which Mr McKillen has a 36 per cent stake in, and which the Barclay brothers are seeking to gain ownership of.

Joint liquidators Kieran Wallace and Eamonn Richardson of KPMG have written to debtors saying they have been instructed to sell the IBRC's loans "as soon as possible". The letter said: "It is currently envisaged that the loans will be brought for sale by the special liquidators in the near future."

A spokesperson for the liquidators said the first phase of indicative offers is expected to commence in September, adding that the upcoming sales process “will provide investors with a unique opportunity to acquire loans within a €22 billion loan book spanning multiple jurisdictions and loan asset classes”.

The Barclay brothers have said they are keen to purchase Mr McKillen’s debts in order to cement their control of the Maybourne hotel group, which consists of Claridge’s, the Berkeley and the Connaught.

They already have a 64 per cent controlling interest over the hotel group, said to be worth more than £1 billion, but Mr McKillen has the remaining 36 per cent stake.

The Barclays, who count ownership of the Telegraph newspaper, London's Ritz Hotel and Littlewoods home shopping as part of their empire, have previously made several bids to buy Mr McKillen's debt held by the IBRC.

However, Mr McKillen is currently in the process of refinancing his debts, to prevent the Barclays gaining full control of the Maybourne group.

The Belfast-born property investor instead wants to buy their stake in the group, and has recently signed a 15-year investment agreement with Qatar’s sovereign wealth fund, in an attempt to do so.

In May of this year Mr McKillen claimed the IBRC’s special liquidators refused to accept his offer to pay €180 million towards refinancing his loans, which he said was part of a “sustained strategy” against him involving the National Asset Management Agency and the Department of Finance that was not in the interests of the taxpayer.

Both State agencies have denied his claims that they were involved in putting pressure on IBRC to sell his loans to the Barclay brothers in Britain in a deal amounting to a loss for the State.

Meanwhile, Dublin solicitor Graham Kenny yesterday confirmed a complaint has been lodged with the Garda Bureau of Fraud Investigation on behalf of Mr McKillen. It is believed the complaint arises from the distribution of confidential information concerning Mr McKillen’s finances by Nama officials.