Wicklow hoteliers to write off €2m
Published 20/05/2010 | 05:00
THE owners of Wicklow's iconic Grand Hotel have agreed to write off €2m owed to them and plough another €200,000 into the business as part of a rescue package approved by the High Court this week.
The deal will also see KBC Bank accept interest-only payments on its €4.5m debt for the next 12 months, while other creditors have agreed to write off 90pc of the €667,000 they're owed.
The package was approved by Judge Mary Finlay Geoghegan on Tuesday and marks the end of the Grand's three-month examinership process under insolvency expert Neil Hughes.
An independent accountants report prepared for the court showed the hotel would have left debts of €4.3m had it been liquidated, while 45 jobs would have been lost.
"This is a really good outcome," said Barry Lyons, a solicitor with Lyons Kenny, which acted for the examiner. "Jobs have been saved, and the company can go on trading."
The Grand is projecting occupancy rates of 60pc for the summer as former Gresham Hotel manager Veronica Timlin assumes the reins at the hotel.
Companies' Office records show the hotel is owned by Dubai-based John Connellan and UK resident Madeline Delaney.
Mr Lyons said that while other parties had "shown interest" in investing in the hotel, KBC's debt made a third-party buy-out difficult.
KBC is owed €4.5m, but the charge is secured against the hotel and its grounds, which are valued at just €2.8m in a wind-down scenario.
The success of the Grand's examinership follows the Lynch Hotel Group's emergence from examinership late last year. Several other hotels, however, have gone to the wall.