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Tensions hit new heights at K Club over Nama talks

TENSIONS amongst members of the K Club are understood to have hit new heights as "make or break" talks between Dr Michael Smurfit and Nama on the iconic venue's future enter into what are believed to be their final stages.

Speaking to the Sunday Independent this weekend, sources at the boom era retreat of Ireland's rich and famous referred to the growing disquiet at the 2006 Ryder Cup venue over its continuing losses, a potentially crippling €55m debt with Nama, and the ongoing failure to dispose of developer Gerry Gannon's 49 per cent shareholding in the club. Such is the anxiety, sources say some members are now agitating for reduced fees while others are contemplating whether or not they will continue with their memberships at all.

"The negotiations have to be brought to a head sooner rather than later. Some members are wondering if they should pay their fees for next year. Things are that tense," one source at the club said.

While it is understood that Dr Smurfit made an offer some months ago to buy out Mr Gannon's stake in the prestigious club, information in relation to the price he is prepared to pay, and the price Nama expects, remains a closely guarded secret.

Whatever Nama decides, sources close to the matter firmly believe that the State agency is highly reluctant to become involved in any partnership venture at the K Club.

"Nama is either going to sell Gerry Gannon's share to Michael Smurfit or to some other party entirely. One thing is certain though, they're not in the K Club for the long haul. They could even manage to put the club into receivership given that there's a €50m bank loan repayable on demand," a club source said.

Indeed, the uncertainty created by that bank loan is acknowledged in the latest available accounts for Bishopscourt Investments, the company that owns and controls the K Club.

According to these, Bishopscourt had its €55m bank loan transferred over to Nama in 2010. The borrowings were noted as being repayable on demand as Bishopscourt failed to meet interest and capital repayments on them.

The accounts further state that Bishopscourt submitted a business plan to Nama in 2010, in which it assumed that the loan would remain in place and the directors, including Dr Smurfit, said that they had prepared the accoun-ts on the basis that the agency would not call the loan in.

Acknowledging the potential consequences for the club's future should that assumption prove to be incorrect, however, a note to the accounts adds: "As no agreement has been reached with Nama in this regard, this indicates a significant uncertainty over the company's ability to continue as a going concern."

A spokesman for Nama declined to comment on any aspect of the agency's negotiations with Dr Smurfit or its intentions in relation to the K Club when contacted by the Sunday Independent.

A spokeswoman for Dr Smurfit said simply: "Dr Smurfit is in discussions with Nama regarding the K Club and nobody else."

Dr Smurfit and Mr Gannon bought the Kildare golf club in June 2005 from the then Jefferson Smurfit Group for €115m. At the peak of the boom, it was a destination of choice for Ireland's mega-rich -- including racing tycoons John Magnier and Vincent O'Brien.

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