independent

Thursday 17 April 2014

Examiner called in over €47m five-star Ritz Carlton hotel debt

AN interim examiner has been appointed to the five-star Ritz Carlton hotel.

The company which owns the 200-room hotel in the Powerscourt Estate in Co Wicklow owes NAMA €47m, the High Court heard.

However, the court also heard the international Ritz Carlton Hotel Company BV, which runs the hotel, has flagged that it is prepared to invest in the luxury venue, which includes a Gordon Ramsay restaurant.

Applying for the interim examiner on behalf of Carrylane Ltd, trading as the Ritz Carlton Hotel, Rossa Fanning said the hotel's ownership structure is complex and involves five different types of investors.

He said the hotel which began trading in 2007 had the misfortune to open at the worst possible time in the economic cycle and has been trading at a loss since it opened its doors.

There are 293 employees, 155 of which are full-time staff.

Mr Fanning said the Ritz Carlton BV Group was willing to fund the ongoing trading losses of the hotel until it breaks even in 2015.

Deposits

The application for an interim examiner was supported by all interested parties including NAMA and the Powerscourt Estate, which gets over €400,000 a year in annual rent.

Counsel said there are already 52 weddings booked for this year and over €800,000 taken in deposits for future weddings and conferences.

Mr Fanning said the appointment of an interim examiner would reassure those people.

According to an independent report by KPMG accountant Shane McCarthy, Carrylane had originally planned to pay down all the bank debt from the sale proceeds of the hotel suites, but as all did not sell it was not possible.

Ms Justice Mary Finlay Geoghegan was told Carrylane has a loan of €45m plus interest from Irish Bank Resolution Corp-oration (IBRC) and this money is now owed to NAMA.

Ritz Carlton, Mr McCarthy said, had entered into an agreement with NAMA to purchase this loan subject to to a survival scheme being sanctioned by the court. If that happens, Ritz Carlton, whose parent company is the Marriott International Inc, would become the effective owner and operator of the hotel, he said.

Turnover for the hotel peaked in its first full year of trading in 2008 at €17m, but since that date it has declined by 26pc to €12.6m last year.

Occupancy in the luxury hotel averaged 41pc last year compared with an overall average in Irish hotels of 61pc. Mr McCarthy said the hotel has a reasonable prospect of survival as a going concern if granted court protection along with the implementation of a cost reduction plan with investment and suitable funding of the losses during examinership period.

Ms Justice Finlay Geoghegan appointed Declan Taite as interim examiner and the case will come before the court again on November 28.

Irish Independent

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