Bank puts Whites Hotel up for sale
Published 16/08/2014 | 00:00
Whites Hotel in Wexford, which went into receivership in 2009, is to be sold by Ulster Bank.
The hotel, which has been run successfully by Dalata Management Services for the past five years, is expected to sell for up to €12 million.
During the property boom, Whites Hotel was re-built at a cost of more than €55 million. It re-opened in 2006, but went into receivership three years later when Kieran Wallace of KPMG was assigned by the main creditor, Ulster Bank, to manage the assets and financial affairs of the company.
Dalata, run by former Jury's Doyle Hotel Group chief executive Pat McCann, was subsequently appointed to operate the hotel.
The move secured the jobs of 170 full-time and part-time staff in the hotel.
Ulster Bank is now selling the Wexford institution along with assets and loans relating to seven other Irish hotels and two hostels as part of a 'divestment' from the hotel market.
Peter Wilson, who has been general manager of Whites since 2006, said he envisaged the sale would be a positive move for the hotel.
'At the moment we are a little in limbo because we don't have an owner as such,' he said. 'We would expect that a new owner would bring re-investment and refurbishment.'
He said he did not believe there would be implications for staff or existing business on the books.
Mr. Wilson stressed that Whites Hotel as a business never lost money but the receivership arose from a 'legacy debt'.
The historic town hotel was bought by businessman Michael Burke in 1997 and closed in 2004 to undergo extensive re-development.
The building project was carried out by a Wexford shelf company called Balmaford which had the same shareholders and directors as Whites Hotel: Michael Burke, Liam Clancy and James White.
In an intricate financial deal, a number of high-profile business people including Glen Dimplex chairman Martin Naughton and Davy Stockbrokers executive David Shubotham invested in the hotel development as part of a tax incentive scheme.
Balmaford signed a contract for €42 million for the building of the 157-room hotel but ran into trouble in 2008 after the main contractors Cleary and Doyle Ltd of Wexford served a court judgement on the company for €3.29 million in a case in which the building firm said it and 60 sub-contractors were owed that amount for work carried out.
In July 2009, a week after Whites Hotel went into receivership, Cleary and Doyle were granted a High Court petition to wind up Balmaford and a liquidator was appointed.
Balmaford was dissolved on December 16 last year.
At the time, receiver Kieran Wallace stressed that Balmaford was not involved in the hotel receivership.
He explained it was the operating company 'White's Hotel Ltd' that had gone into receivership.
The level of debt owed by the operating company was not disclosed but Ulster Bank was named as the main secured creditor along with a number of preferential creditors including the Revenue Commissioners and 'lots of unsecured creditors'.
Mr. Wallace said his task was to 'clean up the company' while Pat McCann was to run the hotel.
Back in 2009, Peter Wilson was quoted as saying it was unlikely that Whites would be sold in the forseeable future, given the decline in the property market.
Property agents CBRE and professional services company KPMG have been engaged to handle the sale of what is the largest portfolio of hotels to go on the market in Ireland in the aftermath of the property collapse.
The overall valuation of the properties including related debt is between €150 million and €200 million.
Many of the properties were developed during the boom when the market was driven by investors anxious to avail of tax breaks.
Among the other properties being sold on behalf of Ulster Bank are the four-star Clayton Hotel in Ballybritt, Galway; Dunboyne Castle Hotel and Jacob's Hostel and Hostel Avalon in Dublin's city centre.
A large number of other hotels funded by a vareity banks are also expected to come on the market in the future.
Dalata which includes the Maldron Hotels is the largest hotel management operation in Ireland and now trades as Dalata Hotel Group PLC, having recently floated on the Dublin and London stock exchanges.