The downfall of the dynamic duo’s – Richard Barrett and sidekick Johnny Ronan’s – business empire continues apace with a report than an interim examiner yesterday appointed to Carrylane Limited, the company that owns the Ritz Carlton hotel in the Powerscourt Estate in county Wicklow. Declan Taite has reportedly been appointed interim examiner and the case is due back in court again on 28th November 2012.
NAMA is one of the creditors to Carrylane Limited being owed €47m, having acquired a €45m-principal loan from IBRC, the €2m difference is presumably accrued interest. It is reported that NAMA hopes to now sell the loan to the operator of the hotel, Ritz Carlton BV Group but the sale was dependent on the appointment of an examiner. It is not reported what NAMA will get for the loan.
The examinership of Carrylane Limited should not affect the operation of the hotel which employs 293 people and which does brisk business in weddings and business conferences. Eyebrows will be raised in the hotel industry at the report yesterday that occupancy at the hotel was just 41% last year.
Carrylane is the developer of the hotel, and makes its money from fees from the operator, Ritz Carlton and also from the sale of suites. The site of the hotel is apparently still owned by the Powerscourt Estate and Carrylane pays €400,000 per annum in rent for the site. Buyers of the suites are reported to have included RTE’s Pat Kenny and Cortina-averse developer, David Agar. Sean Mulryan was also associated with the purchase of two suites at the hotel which reportedly were originally for sale for “up to €2m”.
UPDATE: 27th November, 2012. Brian Carey at the Sunday Times appears closest to this story and reported in last weekend’s paper (not available online without subscription) that NAMA is in fact owed €127m on loans associated with the Ritz Carlton hotel in Powerscourt, comprising €47m owed by Treasury’s Carrylane and a further €80m owed by the Exhort Co-ownership. Brian is being coy about the 157 investors, presumably individuals who comprise the Exhort partnership whose loans were originally from IBRC and he doesn’t name any of them. They are distinct from the 58 investors including RTE’s Pat Kenny who have individually invested in suites at the hotel. Brian says that NAMA “will take a bath” on the loans, though NAMA does expect to dispose of its Carrylane loans to Ritz Carlton, the hotel operator. However investors including RTE’s Pat face losses on rent already owed and face a bleak future with rent no longer guaranteed on their suites. Of course if the hotel goes bellyup, then the investors might additionally face clawback demands from the Revenue Commissioners.
UPDATE: 28th January, 2013. Yesterday, Brian Carey in the Sunday Times – not available online without a subscription – reported that the “proposed” new owner of the Ritz Carlton, US fund Ranieri Partners has written to the investors in suites at the Powerscourt complex requiring them to accept a 50% reduction in guaranteed rent between now and October 2014 and a 50% reduction in their entitlements after that date also – their entitlements after October 2014 appear to be 75% of the rent received by the hotel operator. For those suite owners – included it is understood and reported in the Sunday Times, radio and TV presenter Pat Kenny – who refuse the offer, they face repudiation of their leases under Irish examinership rules which may lead to clawbacks of tax concessions as well as an uncertain future income.
UPDATE: 4th February 2013. Brian Carey in the Sunday Times – not available online without subscription – continues to keep a close eye on developments in the Ritz Carlton. He reports in yesterday’s edition that 41 of the 80 suite owners have agreed to Ranieri Partner’s offer to reduce guaranteed rents by 50% until October 2014 and also to other reductions post-October 2014. The 39 remaining suites face having their leases repudiated entirely, though they would then be free to offer the suites for rent themselves or club together to market them. It is not known if Pat Kenny is among the 41 or the 39. Ranieri is still not the owner, but the betting is that it will be in the not-too-distant future.
UPDATE: 25th February, 2013. The colourful Ranieri moves a step closer to control of the Ritz Carlton in Powerscourt with the acquisition of NAMA’s €47m of loans which had originally been advanced by INBS to the developer Carrylane Limited. Looks as if Ranieri Real Estate, according to the Sunday Business Post – not available online without a subscription – is getting all its ducks in a row prior to taking full control of the development.