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Archive for May 7th, 2013

Last month, NAMA moved against the Kennedy Group, the (London)Derry developer whose assets included the Ramada Portrush Hotel. The initial foreclosure was followed last week with news that NAMA succeeded in having seven additional properties placed in receivership. This afternoon, we learn that the Kennedys are suing NAMA in Belfast’s High Court. Details of the application are expected shortly and will be added as an update here.

Brothers, Alistair Kennedy and Christopher Kennedy (Chris Kennedy) are suing National Asset Loan Management Limited and IBRC; IBRC is now in special liquidation. The case reference is 13/042914 and the case is scheduled for mention next week, 14th May 2013.

We don’t know the details of the application or the remedy sought – but we will soon. But last month, Alistair Kennedy gave an interview to the BBC in the aftermath of the foreclosing on the Ramada Portrush Hotel loan, and he was not at all happy with NAMA’s actions, and seemed to believe that NAMA had acted hastily.

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From Belfast this morning, we learn that Botanic Inns the company which operates 14 pubs in Belfast and employs 600 people has been placed in administration, with KPMG appointed as administrator. A fortnight ago, it was reported that NAMA developer John Miskelly was pursuing a winding-up order against the group after rent arrears arose on the pub chain’s head office building on Ormeau Road in Belfast. At the time, it was hoped that the recovery action would only affect the head office of the group, but this morning, KPMG has been appointed to administer the chain of pubs, restaurants and hotels whilst a buyer is sought. NAMA is a landlord to five of the 14 pubs, after NAMA foreclosed on loans in 2011 owed by Clare developers, Sean Lyne and Noel Connellan. In addition to the pubs, Botanic operates two hotels – Madison’s and Parador – and two off licences.

The news today follows a report in the Belfast Telegraph this morning claiming that three pubs a week were now closing in Northern Ireland, a jurisdiction that has suffered a greater economic downturn than the Republic, on a GDP-type basis – its unemployment rate has also risen to 8.5%, though that is considerably less than the 14.0% unemployed in the Republic. At present, all the Botanic outlets continue to trade as normal whilst the administrator seeks a buyer.

It is understood that NAMA showed some degree of flexibility on the terms attaching to the five outlets under its control. Ulster Bank is understood to be the other major lender to properties from which the group operates. Again, it’s business as usual for customers of the group, but there will be deep concern that not all of the outlets will survive.

UPDATE: 7th May, 2013. The Ulster pub trade body, Pubs of Ulster has issued a statement in which its chief executive, Colin Neill commented “on the latest news about the appointment of a joint Administrator to Botanic Inns Limited and its parent company Kurkova:

This is disappointing news for Botanic Inns Limited and its parent company Kurkova.
Botanic Inns is an iconic brand for the city of Belfast and right across Northern Ireland. It has always had the highest reputation and regarded as one of our blue chip companies and we must do all we can to help support it at this time.

We welcome the Administrators intention that the venues will continue to trade as normal and that regulars and visitors to the Botanic Inns pubs and bars should be reassured that they are open for business.

It is no secret that factors have accumulated over the past year which has made it a very tough trading environment right across the industry. The revenue reserves normally built up by publicans during the Christmas season have suffered in the current trading environment and the negative impact of the recent flag protests compounding the problems faced by the trade.

At the end of 2012 the number of pub licences in Northern Ireland numbered 1252, down from 1481 in the year ending 2007. This can be put down to a number of factors such as the change in social habits, property revaluations, non-renewal of licenses and the impact that supermarket pricing is having. The offer from our pubs and bars here is still of the highest quality and remains a valuable asset.

It is important to reiterate that the pub industry is a key economic driver and its health and vitality are crucial in the sustainability of the economy as a whole. It must be protected.”

UPDATE (1): May 14th, 2013. The BBC reports that six of the pub businesses in administration have been sold to “the Horatio Group”, which is controlled by Stephen Magorrian, the managing director of Botanic Inns up to last week. There is no word about the freeholds in the pubs whose businesses have been sold – “the Botanic Inn, Madisons Hotel, the Kings Head, the Northern Whig, the Elms and the Fly” according to the BBC. 300 jobs are understood to have been saved. There are seven other businesses being run by the administrator, also employing 300 people, and the administrator expresses confidence that these businesses can be sold also.

UPDATE  (2): May 14th, 2013. Industry group, Pubs of Ulster has issued a statement reacting to this morning’s news  in which Colin Neill, chief executive of Pubs of Ulster said “We are pleased to hear the news from the administrator that a buyer has been found for at least 6 of the pubs, including the iconic Bot, previously owned by the Botanic Group.

It is great news that around 300 jobs have been saved and some of Belfast’s most high profile pubs will continue to trade. This is not only good for the industry but vital for the economy here in Northern Ireland.

We are optimistic that the remaining pubs and jobs will be saved in the not too distant future given the quality of the outlets.

Although this is a stark reminder of the challenges faced by the industry in the current environment, we are working with the government and other stakeholders to protect one of the most important economic generators for Northern Ireland.”

UPDATE (3): 14th May 2013. It seems NAMA is the hero of the day, having renegotiated terms on its six properties which had previously been operated by Botanic Inns. The BBC reports that NAMA last negotiated the new terms with Horatio Taverns Limited, a company incorporated in February 2013 whose directors are Stephen Magorrian, his wife Laura Magorrian and Lorraine Ormsby. Apparently it is Ulster Bank which has failed to renegotiate terms, at least for the time being. Pricewaterhouse Coopers appears to have acted for Horatio in the successful negotiations with NAMA, and also in the unsuccessful negotiations with Ulster Bank.

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