Thursday, October 10, 2013

He flew the shahada over the Savoy Hotel

Bloomberg News --

The Savoy, the five-star London hotel once frequented by Winston Churchill, Marilyn Monroe and Claude Monet, would be at risk of breaching terms of bank loans if operating results don’t improve, according to the company. “This risk represents a material uncertainty which could cast significant doubt as to the group’s ability to continue as a going concern,” according to an Oct. 7 filing to Companies House by Breezeroad Ltd., the hotel’s owner. Breezeroad’s directors prepared projections that assume an improvement in business and indicate the Savoy will continue to meet its debts, according to the filing. If the financial projections aren’t met, loans to the company, controlled by Saudi billionaire Prince Alwaleed Bin Talal and a Lloyds Banking Group Plc (LLOY) unit, could become repayable on demand.

The Savoy hotel is an important symbolic player in the Celtic Tiger bust. As recounted by Fintan O'Toole in Ship of Fools, referring to 2004 --

When a syndicate led by the Irish developer Derek Quinlan fought off a Saudi oil sheikh, Prince al-Waleed bin Talal, to buy the Savoy Hotel in London (along with Claridge's and the Connaught) , one of Quinlan's employees had the Irish tricolour flown from the roof, like the Russians taking the Reichstag. "I cried," Quinlan recalled. "My father who was in the Irish Army would have loved to have seen this."

Quinlan sold the hotel to Prince al-Waleed a year later, and it's now him and Lloyd's Bank that's stuck with the seemingly bottomless pit. Possibly the only case where it wasn't the Irish patriot-developers who locked the Irish taxpayer into a bad deal.

Image: Flag of the Kingdom of Saudi Arabia.