Bloomberg News

RBS Said to Consider Jurys Inn Stake as Banks Weigh Debt Deal

February 28, 2012

Feb. 17 (Bloomberg) -- Royal Bank of Scotland Group Plc may take a stake in Jurys Inn as part of a debt-for-equity swap in which the hotelier’s lenders will write down as much as 250 million pounds ($394 million) of borrowings, said two people with knowledge of the matter.

RBS, Allied Irish Banks and Irish Bank Resolution Corp., Jurys’s largest lender, are weighing three plans to restructure the hotel chain’s 650 million pounds of debt, said the people, who declined to be identified because the matter is private. IBRC and Allied Irish don’t plan to take a stake as part of the refinancing, they said.

Jury’s existing owners, Oman Investment Fund, an investment arm of the Sultanate of Oman, and Avestus Capital Partners, a Dublin-based private-equity firm formed by former Irish tax inspector Derek Quinlan, may inject an additional 160 million pounds into the company under one plan, the people said. That figure may be reduced if RBS takes a stake. A decision by the banks is expected within weeks, the people said.

Quinlan led the takeover of Jurys Inn, the operator of 32 three-star hotels in Ireland, the U.K. and the Czech Republic, for 1.17 billion euros ($1.54 billion) in June 2007, the height of a domestic real-estate bubble. The purchase was initially an all-debt deal, including 400 million euros of a bridging loan as Quinlan raised equity for the company.

John Gallagher, who as head of Dublin-based Crownway Investments advised Jurys Doyle Hotel Group Plc on the sale to Quinlan, told the Irish Times within weeks of the deal that he wouldn’t invest in Irish property and that hotels in particular were “incredibly highly valued.”

Assets Written Down

Erfan Hussain, an RBS spokesman, Peter Fitzgerald, an IBRC spokesman, and Helen Leonard, an Allied Irish spokeswoman, declined to comment. A spokesman for Jurys Inn, John Keilthy, also declined to comment.

Vesway Ltd., the holding company that owns Jurys Inn, wrote down the value of its fixed assets and goodwill by 436.6 million pounds in 2010, pushing the company into a 461.6 million-pound loss, according to sterling-denominated accounts filed in the Irish Companies Office in November.

Avestus, known as Quinlan Private at the time of the Jurys Inn purchase, sold a 50 percent stake in Jurys to the Oman Investment Fund in 2008.

Jurys Inn’s lenders hired PricewaterhouseCoopers LLP to advise on the restructuring, the Sunday Times said on Oct. 23, citing an unidentified person familiar with the matter.

--Editors: Steve Bailey, Edward Evans

To contact the reporter on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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