McKillen rejects charges he is getting a 'soft loan'

LOANS OF hundreds of millions of euro owed by property developer Patrick McKillen are being charged at less than 4 per cent, including loans owed to the Irish Bank Resolution Corporation, it has emerged.

Giving evidence to the High Court in London, Mr McKillen said that he owed €360 million-€370 million to the IBRC and to Bank of Scotland Ireland.

Companies linked to him – including Coroin, the holding company that owns Claridges, the Berkeley and the Connaught hotels in London – are indebted to the tune of €1.6 billion.

Under questioning, Mr McKillen said he is “probably paying” 2-3 per cent above the Libor inter-bank rate – which stands just above 1 per cent – on his borrowings.

He rejected charges that he is getting a “soft loan” at favourable interest rates from the Irish Bank Resolution Corporation – the successor to Anglo Irish Bank.

“That is the same rate we are paying HSBC, sorry, HBOS, Bank of Scotland (Ireland). It is the same rate as we are paying Bank of Ireland, same rate as we are paying Ulster Bank – 2.5 per cent “.

He said he was one of the IBRC’s “best clients” and was “working to repay” his debts in full, unlike borrowers of “75 per cent of all loans” from Irish banks.

He dismissed suggestions that a proper rate would be 10 per cent for such borrowing, saying that he had a verbal offer from Deutsche Bank and the German Hypo bank for a 4 per cent loan, secured against assets.

Last week the High Court ruled that details of the Belfast-born developer’s financial affairs should be shared with the defendants in his legal action, which he had tried to stop. The case concerns Mr McKillen’s claim that he was improperly denied the opportunity to buy part of financier, Mr Derek Quinlan’s shares in the three luxury London hotels by billionaires, David and Frederick Barclay.

The twin brothers last year tried to buy debts owed by Mr McKillen from the Irish Bank Resolution Corporation – the successor to Anglo Irish Bank.

Clearly angered by the attempt, Mr McKillen told Mr Justice David Richards that the debt included borrowings on the home occupied by his wife and children, who live in Los Angeles.

“They were trying to buy my debt and turf my wife and children out of their home. That is their game plan. Part of the debt they are buying is my wife and children’s family home and they would have no mercy in calling the loan,” he declared.

During cross-examination, Kenneth MacLean, who represents a number of Barclay companies in the action, said Mr McKillen owns assets in Argentina, the United States, Ireland, France, Dubai, Germany, the UK, Kazakhstan, along with over a dozen properties in Vietnam.

Mr MacLean said: “Can I suggest to you the real reason for the attempt to maintain secrecy about information like this is that you do not want the Irish taxpayer to know that you have a portfolio of assets overseas which could be liquidated in order to pay back the hundreds of millions of euros that you owe to an asset recovery bank. That is the position, is it not?”

Describing the charge as “nonsense”, Mr McKillen responded: “All of our banks are working 100 per cent with us. There was never a question that the banks wanted the loans repaid. We have full support of our banks right up to today.”

He said he had spoken with the chief executive of IBRC, Mike Aynsley, on Wednesday, and he had offered his full support. Usually, Mr McKillen said, he spoke with Mr Aynsley weekly.

He said he owed Bank of Scotland Ireland €55 million, though he accepted that capital repayments due on a €2.3 million loan to the bank last June were not paid.