Receiver confident of hotel's success

THE RECEIVER of White’s Hotel hopes to be in a position to announce a new operator for the well-known Wexford hotel early next week.

Kieran Wallace of KPMG was appointed receiver of the hotel’s operating company on Wednesday on the application of Ulster Bank.

Despite the receivership, the hotel has continued to operate as normal.

Speaking yesterday, he said he was “utterly confident that this hotel will continue to trade and be successful”.

That will come as a relief to 20 high-net-worth individuals who have invested significant sums in White’s which was extensively redeveloped between 2004 and 2006.

The investors, brought together by Davy Stockbrokers, included that firm’s director David Shubotham and Martin Naughten, one of Ireland’s leading businessmen and chairman of Glen Dimplex. The consortium invested €9.6 million of their own funds in a specially formed company, Balmaford, which undertook the redevelopment.

That investment was leveraged with further bank borrowings to fund the €42.1 million redevelopment project as part of a tax incentives then in place for hotel development.

Under the terms of that scheme, the investors are able to set the entire €42.1 million off against their tax liabilities over the seven years succeeding the opening of the hotel.

If the business ceased to function as a hotel, they could face the prospect of the Revenue clawing back relief already granted.

However, the fact that the operating company has run into trouble does not necessarily undermine their investment. As long as a new operator can be found and the hotel continues to function in that capacity, the investors will continue to enjoy the tax reliefs until 2013.