BANK OF Scotland has taken control of Lyrath Estate Hotel, the Kilkenny property owned by businessman Xavier McAuliffe, on foot of a debt estimated at close to €50 million.
The bank appointed Kieran Wallace of KPMG as receiver to the hotel yesterday afternoon. The debt is understood to be in the region of €50 million, and is secured against the property.
The receiver intends to keep the hotel running and leave the current management, led by Patrick Joyce, in place. No jobs were lost as a result of his appointment.
Lyrath Estate is close to Kilkenny City on the old Dublin road. Mr McAuliffe bought the property from Paschal Phelan, one time head of Master Meats, for a reported €6 million.
He spent about €50 million developing the hotel, which has 137 bedrooms, golf courses and other facilities. These included a 1,500-seat convention centre, which Mr McAuliffe once predicted would allow the business to weather any storm in its sector.
His investment was backed up by a syndicate of 60 private individuals, recruited by consultant Frank Brennan and solicitor Randal Doherty, who put €10 million into the project. The hotel opened in 2006, as the property bubble was heading towards its peak. The opening itself was marred by a court case in which the company was fined €1,000 for putting up an elaborate entrance without planning permission.
As a result of the row, the then taoiseach, Bertie Ahern, pulled out of an arrangement to perform the formal opening. Kilkenny County Council subsequently allowed the company to leave the entrance in place. Auditors’ reports filed for the holding company show that the business lost money every year from 2007 to 2010, when it did make an operating profit of €31,000. However, a depreciation charge of €209,000 left it with pre-tax losses of close to €280,000. Losses at the business reached a peak in 2009 when they came in at just over €1 million. Lyrath Estate lost €654,000 in 2008 and €360,000 in 2007.
Its auditors, Tralee, Co Kerry, firm, Kelly Foley, have consistently questioned the company’s ability to remain as a going concern in their reports. Last year, its management predicted that 2011 would be profitable. It was not possible to contact a spokesman for the hotel yesterday to confirm if this was the case. The company is not due to publish returns for last year for several months.
The only bank with a registered charge against the company is Bank of Scotland. The bank did not comment yesterday.
