Financier Derek Quinlan is close to completing the final disposal of his remaining assets in the National Asset Management Agency (Nama), a move that could end the stalemate in a battle for control of three of London's most famous hotels.
Mr Quinlan’s move towards exiting Nama has focused the attention of rival bidders on how to secure control of his remaining personal liabilities to Nama, estimated at about €300 million. Paddy McKillen, an Irish shareholder in the group that owns the Berkeley Hotel, Claridge’s and the Connaught, is understood to want to acquire the liabilities, as do rival shareholders the Barclay brothers.
Bankruptcy strategy
By acquiring Mr Quinlan’s debts, Mr McKillen could move to bankrupt him, something that, under the complex ownership rules of the hotel group, would force the former tax inspector to sell his shares in the hotel group to other shareholders on a pro-rata basis.
This would lead to Mr McKillen having 52 per cent of the group’s shares, as against the Barclays at 48 per cent, giving him control of the board.
The Barclays, on the other hand, by taking control of Mr Quinlan’s remaining Nama debt, would close an important chink in their armour, as the financier has sided with them in their battle with Mr McKillen.
Mr Quinlan’s remaining assets in Nama are understood to include a stake in the Clarence Hotel in Dublin, an interest in a lease on Audley Street in London and investments in two property syndicates, one in Dublin’s IFSC, the other in London.
Site shareholding
His biggest remaining debt relates to his shareholding in the Irish Glass Bottle site, which Nama is expected to sell next year as development land prices in Dublin rally. This will not be enough to cover the site’s property bubble borrowings.
“Discussions with Nama are confidential at all times,” a spokesman for Mr Quinlan said in an email. “Derek’s debts have been reduced by €3.84 billion [owed to Nama and other banks] since he started deleveraging his portfolio in September 2009. What remains in his portfolio is confidential.”
“I am not in negotiations to exit Nama. I am still in the process of selling assets and maximising the return to the agency. We are working very well with Nama, which is our last creditor institution, as all other banks . . . have been settled,” said another spokesman for Mr Quinlan.
Meanwhile, Khalaf Al Habtoor, the billionaire chairman of Dubai conglomerate the Al Habtoor Group, said last week that an attempt to buy the Berkeley Hotel, Claridge's and the Connaught in London from twin brothers David and Frederick Barclay failed last summer.
A spokesman for the Barclay brothers however said: “There has been no discussions and no offer. There was a preliminary approach and this was immediately rebuffed.”
“Derek was aware of the approach but the offer completely underestimated the value of the hotels and had no hope of success,” a spokesman for Mr Quinlan added.
