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Goldman Sachs to buy loan on Belfast's Merchant Hotel


Merchant Hotel's Great Room restaurant

Merchant Hotel's Great Room restaurant

Conor Devine of GDP Partnership

Conor Devine of GDP Partnership

Mandatory Credit Darren Kidd/Pre


Merchant Hotel's Great Room restaurant

International investment bank Goldman Sachs is making its first substantial investment in Northern Ireland with a deal to buy loans on Belfast's Merchant Hotel and other assets from Ulster Bank.

Goldman Sachs is the preferred bidder to buy loans relating to the Cathedral Quarter hotel and four others in the Republic - packaged up as Project Nadal - after winning out over four other bids.

All the properties remain open for business as Ulster Bank continues the process of divesting itself of property debt through portfolio sales.

Neither Goldman Sachs or Ulster Bank were available to comment on the deal, Goldman Sachs' first investment in the province.

The bank, king of the so-called 'bulge bracket' of heavy-hitting international investment institutions, has already instructed solicitors in Belfast, which could indicate long-term intentions.

Goldman Sachs has previously been active in Northern Ireland in an advisory capacity, and joined Barclays and Deutsche Bank in advising poultry giant Moy Park on a recent bond issue.

The business is the pre-eminent Wall Street "bulge bracket" firm - but as well as advising companies on M&A activity, also has an investment arm of its own.

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There was no comment from Beannchor Ltd, the business established by Bill Wolsey which runs the Merchant Hotel and a large number of pubs, including 14 which were also part of Project Nadal.

There was no comment from business advisers KPMG and commercial property agents CBRE, instructed by the bank to sell the loans relating to the assets.

Conor Devine, principal of property advisory partnership GDP, said Goldman Sachs was one of a number of investors to identify Ireland as a place of high returns.

"For local borrowers who are affected by this recent trade, they will now enter into negotiations with Goldmans trying to agree terms so they can continue with their business interests," he added.

"The real concern locally is the out-workings of these loans by the new owners, and the level of support the new bank will provide for local businesses."

Anyone whose loans had been sold on to a private equity fund or bank such as Goldman Sachs was now facing uncertainty.

"The sooner they get agreement with the new lender or bring in a capital partner to regain control of their own affairs the better," Mr Devine said.

It's understood Goldman Sachs has bid unsuccessfully in other recent Ulster Bank portfolio sales before winning out for Project Nadal, a development first reported in the Irish Times.