Canyon Capital Advisors, an investment fund based in Los Angeles, has agreed to acquire Ulster Bank’s loans in Moran Hotels which is the chain run by Limerick businessman Tom Moran.
It is believed that Moran Hotels owe Ulster Bank almost €120 million. It is not certain if Canyon is paying for the debt.
However, a significant discount is likely to have been given considering the current weakness of the Irish economy and the collapse in property values in the country. Last week, a deal was reached that will result in Canyon controlling a 35% stake in the hotel business which will increase its influence over the group.
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In January of this year, Canyon bought almost €150 million in loans held by Lloyds Banking Group, which were a legacy from when its Bank of Scotland (Ireland) subsidiary operated in this market.
Canyon paid just €42 million in order to buy the Lloyds’ loans. This represented a discount of around 72% on the face value of the debt. Canyon is currently seeking to refinance this debt. According to its website, the company manages investment funds and separate accounts amounting to around $23 billion in assets. Moran Hotels own 10 properties in Dublin (including Bewley’s Hotel in Ballsbridge and the Red Cow complex in southwest Dublin) Cork, London, Leeds and Manchester.