PUBLICANS LIAM and Des O’Dwyer are believed to have agreed to pay about €400,000 to acquire the goodwill and fixtures and fittings of four hotel and bar properties in the Capital Bars group that the brothers put into provisional liquidation last month.
The properties involved were the Break for the Border and Dragon pubs, and the Trinity Capital and Grafton Capital hotels. All of these entities were loss making in advance of being placed into provisional liquidation.
In addition, the O’Dwyers are expected to pay more than €80,000 for stock at the pubs and hotels. The deal was agreed last week with provisional liquidator Jim Stafford, who has to seek court approval for the scheme.
Separately, Kieran Wallace of KPMG will seek the permission of the High Court on Tuesday to confirm his appointment as examiner of four entities controlling other pubs in the Capital Bars group.
These are Cafe en Seine, the George, Zanzibar and Howl at the Moon.
This would allow Mr Wallace to proceed to put together a scheme of arrangement to save the four bars from closure. Each of the bars is said to be profitable.
The move by the O’Dwyers to seek court protection for the bars and hotels resulted from AIB withdrawing banking facilities from Capital Bars, which owes the bank €25.7 million. Mr Wallace is expected to seek a refinancing of the four profitable bars, which is likely to involve AIB taking a haircut on its debt.
It is understood that Anglo Irish Bank, which is owed €120 million by the O’Dwyer brothers relating to many of the properties that Capital Bars operates from, could provide financial support for the bars as part of a refinancing of the entities.
In June, AIB had an independent valuation carried out of the various leasehold interests within Capital Bars. That valued the leaseholds at €15.5 million.
The AIB debt arose from the costly refurbishment and fit-out of premises within Capital Bars. This included an estimated €10 million in fit-out and legal costs relating to Dandelion (formerly known as Planet Hollywood) on St Stephens Green. The bar/restaurant was sold in March 2008 for just €1 million.
AIB’s debt is supported by a personal guarantee of €8 million by the O’Dwyer brothers. Sales at Capital Bars declined by 26 per cent this year, as a result of the recession. Turnover is forecast to fall to €26.7 million in the current year from €34.1 million in 2008. A loss before depreciation and taxation of €736,123 is expected.
Within the group, the four bars currently in interim examinership are expected to make a combined profit of €490,050 this year on sales of €14.7 million. The O’Dwyers will next week reduce the charge for all pints to €4 from Mondays to Thursdays.
