Breaking news this evening that the 5-star Ashford Hotel in Cong, Mayo (the website appears to be down this evening) has been placed into receivership; both RTE and TV3 report that Luke Charleton and David Hughes of Ernst and Young have been appointed as receivers.
The hotel is understood to be still controlled by NAMA Top 10 developer, Gerry Barrett. Accounts for the hotel’s holding company, Ashford Castle Estate Limited, for 2008 and 2009 showed a loss of €39m for the two years, of which €35m related to a writedown in assets, mainly the hotel itself. The company was controlled by Gerry Barrett and his wife Catherine.
The receivers are keen to emphasise that the hotel is trading as normal, an important consideration ahead of the traditionally lucrative Christmas season. Deposits already paid will be fully honoured according to the receivers, there will be no job losses – it is understood the hotel employs nearly 150 people – and “suppliers will be retained”; no word on what happens with unsecured debts owing to suppliers however.
It is not clear if the receivership is at the behest of NAMA, and NAMA has not yet commented on the reports. Gerry Barrett is associated with a slew of hotels in Ireland including the “D Hotel” in Drogheda, the Meyrick and “G Hotel” in Galway, the Grand Canal Dock hotel in Dublin and Jury’s Hotel in Limerick. Last month, the Irish Times reported that NAMA was set to agree the sale of Dublin’s Hatch Hall development, the sale was being handled by agents Douglas Newman Good Commercial on behalf of Gerry Barrett and his main vehicle Edward Holdings.
UPDATE: 29th November, 2011. NAMA has responded to say that this receivership is not at its behest. There are some 80 hotels out of over 900 in the State which are subject to NAMA loans, and NAMA has taken foreclosure action on only a fraction of these 80. It is understood that Bank of Scotland (Ireland) was the biggest lender to the Irish hotel sector, but that doesn’t stop the routine confusion over any Irish hotel in receivership being assumed to be in NAMA, for example the Parknasilla Hotel in Kerry associated with NAMA Top 10 developer Bernard McNamara is also NOT in NAMA, though that seems to be routinely ignored by the media.
This was a Certus/BOSI/Lloyds decision. Not NAMA.
Unnecessary and a great shame! A very nice and low key man.
Agree with garfunkel such a shame. Yes a nice man and very hard worker . Bosi just want out
Have to agree with garfunkel …. a great great
shame. Having worked in the hotel industry for the best part of 15 years, I found on every occasion that I came into contact with mr. Barrett since his involvement in the industry he was a gentleman and an astute hotelier. What a huge shame and I am sure he will be devasted for the staff in the castle of whom he always had great great praise.
Agree with garfunkel …. This move by bosi is a real real shame. Having worked in extensively in hospitality sector and having come across Mr. Barrett on several occasions can only say the ashford estate will find itself missing a key visionary influence who is a gent in all his dealings. A true shame. Am sure Mr. Barrett will be devasted for the staff who he held in very high regard throughout his tenure.
Garfunkel, I agree. Why didn’t BoSI simply sell this hotel rather than put in place a receivership structure that seems quite complicated and will surely not serve it’s shareholders well ? This reflects a lack of joined up thinking between Lloyds, where I suspect the decision was made, and their local counterparts as there had been considerable interest in this asset. Also the appointment of the hotel operator, managed by a former ICC executive, smacks of cronyism. Badly handled.
Local reporting has it that other hotels in the Group are unaffected by this move.
It does seem bizarre that this was done when it was already part of a larger group of hotels more in keeping with it than a Crowne Plaza!
Anecdotally; this was a decision by Lloyds at the behest of minions in Certus. It was not seen coming down the line as Gerry had been working closely with them for over a year. When the decision was announced it came as a massive surprise as all indications had suggested their willingness to work with him.
The value is now negligible and they may well have shot themselves in the foot. No doubt there will be interest but I also understand the Castle isn’t quite up to standard. The vultures will get this for a song. One wonders if it will be the start of a trend as Lloyds clears out it’s Irish stable?
Agree with the others that he is an absolute gentleman and wish him well.
Some confusion on who pulled the trigger,according to the local paper.
‘Galway property firm Edward Holdings has agreed to relinquish control of Ashford Castle to Bank of Scotland…’
‘Ernst & Young will be appointed as receiver over Ashford Castle and Grant..’
Thttp://www.galwaynews.ie/22959-ashford-castle-goes-voluntary-receivershiphornton over the other secured assets.’
Assume they will keep the ‘gates’ open !
Gates still closed!
Much discussion of this in Dublin today.
It is my understanding that Lloyds’ decision to use the nuclear option has caused much surprise and consternation in the other financial institutions and NAMA itself. It is considered excessive and unwarranted – particularly as the property had been trading well and the management team are considered amongst the best in the country.
There was also talk that Gerry was poorly served by his managers in Certus, who were described as ‘inept’ by one agent. I have also found this link to one of the Galway papers where the move has been described as consensual in that Edward Holdings invited the Bank to appoint receivers:
http://galwayindependent.com/stories/item/247/2011-48/Ashford-Castle-enters-receivership
Hancock in IT today claims..’was placed into receivership by its owner, Galway businessman Gerry Barrett’
Strangle timing just before the ‘Holiday Inn’ season,not much synergy with Tifco’s existing portfolio,this will be the jewel in their ‘Crowne’
‘It is understood that Tifco Hotel Group, a specialist Irish-owned asset manager, has been appointed by the receivers to run the castle.’
http://www.tifcohotels.ie/tifco-hotel-history/owned-properties.348.html
http://www.irishtimes.com/newspaper/ireland/2011/1130/1224308335911.html
I am UK based and this decision was also much commented upon here today. Lloyds made the decision, rumoured they had received a substantial offer beforehand, messed the company around, then did not take it but invited them over to give them the news which seems cruel. This type of aggressive action displays a lack of understanding of the assets or the geography and a disregard for Certus where Joe Higgins and his team look very silly and superfluous. Suspect they are going to get a hard lesson here-wouldnt want Certus to be my asset manager. As a shareholder not happy.
The hotel market seems to be very resilient. The Morrison received 10 bids, the highest over €20 million with most of the interest coming from overseas investors. We may have a spate of hotel sales in the new year based on this result.
All NAMA hotels should be closed down asap. It is highly unfair for banks to be paying for glossy newspaper advs and fantastic tv advs while their competitors cant afford this luxury! In the meantime the people who supplied such luxurious fixtures and fittings to these “luxury” hotels are told to take a hike and get over it !