Spending hundreds of millions of dollars on hotels in the years and weeks before the coronavirus upended travel is the kind of thing that might catch a short-seller’s attention. The fact that most of these hotels were in the U.K., a country struggling not only to contain the pandemic but also to figure out what, exactly, Brexit means might pique this interest a little further. Throw in the arrest of the company’s controlling shareholder, and there are hardly enough Vivion Investments bonds available to lend to meet the demands of those desperate to bet against that sort of trifecta.
Speculators are predicting more pain for a firm that has more than half its real-estate portfolio tied to British hotels as the U.K. suffers through yet another national lockdown…. As much as 16% of the company’s 1 billion euros ($1.2 billion) of bonds are currently on loan to investors seeking to profit if the price drops….
JPMorgan Chase & Co. strategists cited the potential for the tax investigation to leave the Dayan family facing a hefty bill as a central reason for issuing a “sell” recommendation on Vivion’s bonds this week…. The founder may need to raise cash by calling for repayment of a loan to the company or selling assets to the firm at an inflated price, they said.