The family-owned
Moran Hotel Group
, which includes the well-known Red Cow complex in Dublin, has completed a major financial restructuring that will reduce its debt burden by about €500 million.
The deal is also believed to include a debt-for-equity swap by the hotel group's lenders AIB and Bank of Ireland. This will give the banks a substantial shareholding in the business alongside Los Angeles- based investment fund Canyon Capital Advisors, which this year bought out the loans held by Ulster Bank and Lloyds Banking Group. Canyon has a 35 per cent stake in the Irish hotel chain.
Founder Tom Moran, who is from Limerick, and his family will retain a significant shareholding in the business and continue to manage the hotel group. A new board of directors is expected to be formed to reflect the changed shareholder structure.
Restructuring
It is understood that the hotel group's debt levels will drop from about €720 million to about €225 million following the restructuring. This should put the business on a sustainable footing and allow it to invest in its properties and continue to grow its revenues.
The hotel group declined to comment on the details of the restructuring. In a statement, it said: “The board of the Moran Hotel Group confirms that they have completed the restructuring of the group’s banking facilities. The deal agreed includes a restructuring of the group’s debt to a sustainable level and will also involve the lenders taking a material equity interest in the group going forward.”
The company said it was “satisfied” that the agreed restructuring would “safeguard the future of the group and its 1,200 employees”.
No comment was available from the lenders.
Performance
The Moran hotel chain has performed strongly in the past five years, with strong profit margins recorded at most of its sites in Ireland and Britain.
Moran Hotels runs 10 properties in Dublin, Cork, London, Manchester and Leeds. This includes the well-known Red Cow complex in southwest Dublin and the Bewleys hotel in Ballsbridge.
It has been hamstrung in recent years by debts associated with its €580 million acquisition of Bewleys Hotels in 2008, a deal completed just before the bubble burst.
Latest accounts for T&S Taverns Ltd, which operates Moran Hotels, shows that it made a loss of €41.8 million on revenues of €80.5 million in the year to the end of January 2011.
