The Royal Bank of Scotland has foreclosed on a billion pounds' worth of property belonging to business groups of Yitzhak Tshuva, Zadik Bino and Igal Ahouvi, the Financial Times reported yesterday.
Negotiations fell through for the portfolio holding company to recapitalize the portfolio of 42 Marriott hotels across Britain. The Financial Times said the Royal Bank of Scotland took control of the portfolio after failing to secure a debt-for-equity restructuring of one of the largest individual real estate loans it made during the property boom.
The partners had bought the portfolio for abou £1.1 billion, of which the Royal Bank of Scotland lent most of the £700-millionsyndicated loan secured by the hotels.
Ernst & Young has been appointed receiver of portfolio, the Financial Times reported.
The portfolio's holding company is owned by three Israeli and two foreign companies. Yitzhak Tshuva's property vehicle Delek Real Estate owns 17%. Igal Ahouvi's Blenheim owns 13%. Zadik Bino's FIBI fund owns 5%. Dorea owns 3%. The biggest stake is owned by the Ireland-based investments fund Quinlan at 44%. The portfolio, which includes four- and five-star hotels in England, Scotland and Wales, will be one of the largest single property receiverships so far in the Royal Bank's debt book, according to the newspaper. The Royal Bank of Scotland was not immediately reachable for comment, Reuters said.
The portfolio could be sold in whole, or the hotels could be sold individually.
Sources near Delek Real Estate said Igal Ahouvi negotiated with the Royal Bank of Scotland for the better part of a year. Appointing a receiver to the portfolio was a show of muscle by the bank after the parties failed to find a meeting point, the sources said.
They added that the act of appointing a receiver has no effect on cash flow or financials; the only issue at stake is image.