Jurys Doyle may sell a significant minority stake in its budget inn business to fund expansion and repay some of its €870 million debt, writes John McManus.
"They could sell 40 per cent, which would raise enough to accelerate the development of the inns business and reduce debt," said a source close to the group.
Investment bank Merrill Lynch is due to report back to the company in the new year.
The Merrill Lynch report is expected to outline a range of financing options, including bringing in outside investors for the 20-strong Juys Inns business.
However, sources close to the company are adamant that the decision to hire Merrill Lynch was not triggered by pressure to repay some of the debt taken on when the group was taken private by the extended Doyle family and other investors late last year.
"There is no pressure on debt management.
"No payment is due. They have a long-term strategy to reduce debt," said the source.
In recent weeks, the company has restructured the ownerhsip of its two bigest assets, the Burlington and Westbury hotels in Dublin to facilitate a sale.
Another group property, the Montrose Hotel in south Dublin is also up for sale but remains unsold.
Companies Office documents show that JDH - the vehicle owned by the Doyle family and other investors - borrowed €560 million from AIB in October 2005 to mount its bid for Jurys Doyle.
This was subsequently refinanced by the second debt facilty of €1.3 billion organsised through AIB.
This debt now stands at €870 million following the sale of the Jurys Hotel and Berkeley Court sites in Ballsbridge for €375.5 million.
Prior to the take-private, the group had debts of around €400 million including loan notes.
Merill Lynch will work alongside Crownway, the investment vehicle of the Gallagher family who are advisers to JDH, the parent of Jurys Doyle.
The principals of Crownway are Bernie Gallgher - the daughter of the foudner of the Doyle Hotel group - and her husband John.
In a statement last week, Crownway said the group had "ambitious plans, on the back of a strong performance in 2006, to significantly accelerate the roll-out of Jurys Inns in the UK and to enter into new European markets".
