CO CLARE-BASED hotel group Lynch Hotels has voluntarily entered examinership but said all pre-booked events will proceed as planned.
The group, which is owned by Ennis-based businessman Michael Lynch, said it entered examinership to restructure the business.
Examinership provides a period of court protection from creditors – in this case 100 days – while a company seeks to negotiate a settlement.
Mr Lynch said the group had 530 employees and was “a fundamentally sound business”, but needed to restructure. It owns six hotels and runs a seventh. “It is business as usual in all seven of our hotels, and we look forward to welcoming all of our customers as normal.”
The company said all pre-booked events, weddings and leisure bookings throughout the Lynch Hotels group were secured and will proceed as planned. Michael McAteer of Grant Thornton, Dublin, has been appointed to conduct the examinership proceedings.
The group’s hotels are based in the west of Ireland and include the George Hotel in Limerick city and Breaffy House Hotel in Castlebar, Co Mayo. It is also involved in property development. In a bid to curtail losses and concentrate the group’s activities in the west, it sold the 270-bedroom Green Isle Hotel at Newlands Cross in Dublin early last year to Brian Brennan of Brennan Hotels, resulting in a €566,000 loss for the group.
In June 2008 it sold the four-star South Court Hotel in Limerick in a sale and lease-back deal that generated a €10 million profit, and the following month sold Hayden’s Hotel in Ballinasloe, Co Galway.
Accounts for the main company in the group, West County (Ennis), show it made a pre-tax loss of almost €3 million in the year to the end of March 2008. This compares to a pre-tax loss of €12 million for 2007.
This brought the group’s accumulated losses carried forward to just under €20 million on turnover of €41 million in 2008.
A spokesman for the group said last night that despite intense competition, business in the first quarter is showing strong growth on last year.
The group was established in 1968 by Mr Lynch’s parents when they ran the West County Hotel in Ennis.
A helpline – 1890 669900 and 065 6823000 – has been set up to deal with customer inquiries.
The Irish hotels sector has come under huge pressure since 2008, with a survey from accountancy firm Horwath Bastow Charleton earlier this week estimating profits in the sector fell 25 per cent last year.
Profits could fall by up to 70 per cent this year and the sector is heavily indebted, the report found.
A receiver was appointed to White’s hotel in Wexford last week and Pat McCann of Maldron Hotels has taken over the management.
