PREMIER HOTELS Ltd, one of the subsidiaries of hotel management firm Prem Group, is facing liquidation after failing to agree a deal on a six-figure rent arrears bill with one of its landlords.
The company, which was a joint venture with developer Paddy Kelly and his family until they exited last year, has called a creditors’ meeting for early next month to appoint a liquidator.
Premier Hotels previously managed six of the Prem Group’s properties but it transferred the other businesses to new Prem Group companies between June 2009 and May 2010. Up until yesterday, it had only been responsible for Days Hotel, Dublin airport.
The Dublin airport hotel’s landlord, Pierse Santry Cross, part of the Pierse construction group, appointed a new operator to the hotel yesterday, but would not reveal the company’s identity. The hotel will not close and the change will not affect its 35 staff.
Premier issued a statement saying that it has been in talks with Pierse to secure a rent agreement that reflects market conditions. “A satisfactory outcome was not reached and a decision has been taken to cease our management of this property,” it said.
A spokesman for Pierse confirmed that the pair had had talks, but added that there had been no meaningful discussions about arrears owed by Premier to its landlord. “They have decided to put the company into liquidation, we did not force them,” he said.
Premier’s spokeswoman refused to say how much in arrears it owed Pierse Santry Cross. The bill is said to run to a substantial six-figure sum.
The company’s latest accounts only show figures for the year 2007 when it lost €245,000 before tax. The returns say that up to May this year, Premier had built up arrears on various hotels that it had leased and was managing.
Between June 2009 and May 2010, it transferred the leases on a hotel in Kilkenny, and three in Dublin, Leeson Street, Park West and Sandyford, to new special purpose companies established by its parent to lease and manage them individually under new terms agreed with the landlords. At the same time it gave up a lease on a Harcourt Street hotel.
Two Premier shareholders, Peter Reddan and Gerard McNulty, control a new holding company, Arago Investments, set up in April 2009, which in turn controls the Prem Group. Jim Murphy, one of its founders, is its managing director. Arago took over Premier and its subsidiaries and controls the special purpose vehicles to which the other four hotels were transferred. Consequently, Premier’s liquidation will not affect those businesses.
Accounts for Premier show that at the end of 2007 shareholders’ funds were €1.4 million in the red.
Prem Group manages hotels in Ireland, Britain, Belgium and France. Its spokeswoman said yesterday the overall business was performing well.
