Receiver appointed to Capital group pubs

AIB HAS appointed a receiver to four businesses within the Capital Bars group of pubs in Dublin after failing to agree a deal…

AIB HAS appointed a receiver to four businesses within the Capital Bars group of pubs in Dublin after failing to agree a deal with publicans Liam and Des O’Dwyer relating to a €25.7 million debt.

Pearse Farrell of accountants FGS was yesterday appointed as receiver to the well-known Dublin pubs Cafe en Seine, Howl at the Moon, Zanzibar and the George. This followed the conclusion of an examinership process that has been running since September.

Mr Justice Brian McGovern yesterday afternoon granted an application by examiner Kieran Wallace of KPMG to be discharged, after which the judge was told by counsel for AIB that the bank would be appointing a receiver.

It is understood that the O’Dwyer brothers had offered AIB, which holds a charge over the leases on the pubs, about €7 million as part of a refinancing aimed at rescuing the businesses.

READ MORE

The O’Dwyers also offered to write off €2.2 million that was owed to Toji Holdings Ltd, Capital Bars’ parent company.

The brothers had hoped to secure funding for the refinancing of the pubs from Anglo Irish Bank, which is owed €120 million by the O’Dwyers relating to the freeholds on the properties.

But this was not possible in the context of the challenges being faced by state-owned Anglo.

AIB is believed to have stood firm on seeking the full €25.7 million it is owed.

In June, AIB had an independent valuation carried out of the leasehold interests within Capital Bars, which placed a value of €15.5 million on them.

The O’Dwyers commissioned their own valuation, which valued them at about €7 million.

The O’Dwyers were one of two parties that engaged with the examiner to buy the pubs.

Cathal Jackson, owner of the Copper Face Jacks nightclub on Harcourt Street, is believed to have bid about €3 million to buy Cafe en Seine.

In a statement, Capital Bars expressed its disappointment at failing to agree a deal with AIB.

“Toji Holdings Limited, Capital Bars’ parent company . . . put a number of proposals before AIB aimed at safeguarding the businesses and the 175 associated jobs,” the company stated.

“Unfortunately agreement between Toji and AIB could not be reached and has resulted in the bars today entering a receivership process.”

The company said all of the bars would “continue to operate as normal through this process”.

It is understood that sales at the pubs have continued to decline in recent weeks and are about 30 per cent lower compared with last year. The pubs are expected to make a combined profit of €300,000 this year.

It is not clear how the receiver will proceed. He could seek to trade the business for some time until the conditions for a sale improve.

The O’Dwyer brothers, meanwhile, will now concentrate on four businesses that they bought back from provisional liquidation in early October.

These were the Break for the Border and Dragon pubs, and the Grafton Capital and Trinity Capital hotels. All of these had been loss making.