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Moran Hotel Group loans sold to US hedge fund

Thu, 03-Jan-13

The Moran Hotel Group loans of Lloyds (UK’s largest mortgage lender) are sold to US hedge fund, Canyon Capital Advisors, according to the hotel operator. The group is “at an advanced stage of a restructuring plan,” it said. “Lloyds agreed to sell as much as €140 million in loans at a discount of about 70 per cent to a unit of the US hedge fund,” said two people with knowledge of the transaction. The loans have greatly affected the profit scenario and online hotel reservations.

As well as the Red Cow Inn in west Dublin, the group owns hotels in London as wells as the Bewley’s Hotels in Dublin, Leeds and Manchester.

The Irish loans with Lloyds that were acquired through HBOS takeover are also for sale.

After the property was collapsed in 2008, London-based bank took €11.8 billion pounds of impairment charges on Irish loans, as per the calculations of the Bloomberg News.

As per the Irelands companies’ office registry, “Moran Hotels owed €693 million to banks at the end of 2011, latest available filings by Dublin-based TS Taverns Ltd, the group holding company.”

“The Canyon accord leaves Moran Hotels owing money to Bank of Ireland, Allied Irish Banks, Royal Bank of Scotland Group’s Ulster Bank and the hedge fund,” the people said.

As per the May report of Sunday Times, “The banking syndicate hired accounting firm Grant Thornton Ireland last year to review a five-year business plan for the indebted hotel group.”

“Much of the debt stems from the Tom Moran-led company’s acquisition of the Bewley’s Hotel Group in 2008 from Bert Allen,” said a director at Slaney Meat Packaging.

“Profit per room at Irish hotels has dropped 44 per cent since 2007 and the industry has debts of about €6.7 billion,” Galway University economist Alan Ahearne said in October.