K Club has the investor firepower for survival
Published 19/08/2010 | 05:00
What is the difference between life and death in recession crippled Ireland? Commercially it comes back to one of the oldest fundamentals of them all -- do your shareholders have deep enough pockets?
The K Club and Merrion Hotel, both opulent high-end properties, are losing big money and fast. The former is backed by Dr Michael Smurfit who still has a very large net worth.
The latter, a luxury hotel in Dublin city centre, has Lochlann Quinn and Martin Naughton behind it, surely guaranteeing safety no matter how bad the trading losses become.
People would like to think that surviving a recession is all about sales and plain old honest toil, well think again. The latest accounts of the K Club tell it like it really is.
"The group will be dependent on the financial support of its shareholders''. The banks also help of course too, but the banks will also pay attention to the resources of the shareholders when assessing how much credit to advance to the business.
Either way, thousands of businesses around the country this year won't be worrying about the top line, but simply worrying do their owners have the pockets to tough it out for another 12 months.