THE CAPITAL Bars chain of pubs and hotels, which is owned and run by the O’Dwyer brothers Liam and Des, has become the latest highprofile hospitality group to feel the effects of the credit crunch.
The O’Dwyers yesterday moved to have an interim examiner appointed by the High Court to the companies operating four of its biggest pubs – Café en Seine, The George, Howl at the Moon and Zanzibar.
This gives them protection from creditors for up to 100 days. In their Celtic Tiger heyday, the O’Dwyers became synonymous with the superpub phenomenon and their pubs were among the biggest and best known in Dublin. But sales have fallen by about 20 per cent this year.
They also secured the appointment of a provisional liquidator for the Trinity Capital Hotel on Pearse Street; the Break for the Border pub and Grafton Capital Hotel near St Stephen’s Green and the Dragon bar on South Great Georges Street.
The O’Dwyers are seeking protection from AIB, which is owed €26 million and is believed to have recently threatened to withdraw its facilities. It is understood that the brothers offered to underwrite the cash requirements of the business for a two-year period, but this was not accepted by the bank.
As landlords for most of the properties, the O’Dwyers are also owed a substantial sum, believed to be in excess of €5 million.
Separately, Anglo Irish Bank is owed about €120 million relating to the purchase of the properties by the O’Dwyers. The bank continues to support the group. Turnover for 2009 is projected to be €27 million compared with €34 million last year. Accounts for Toji Holdings Ltd, the parent group of Capital Bars, show that the company made a loss of €23.6 million in the year to the end of September 2008.
Capital Bars has been one of the biggest players on the Dublin pub scene for many years. It delisted from the stock market in 2001 and, in recent times, has diversified into the hotel trade and sold some of its pubs and clubs, including the Dandelion, Sinnotts and Bad Bob’s.
The O’Dwyers spent millions refurbishing the properties, with Café en Seine establishing itself as a trendy hangout. But the pubs have struggled as the economy has declined. All the companies will continue to trade and none of the 330 staff are being let go. The O’Dwyers believe the four pubs are viable and can trade profitably in the future. It is also hoped to secure the future of the properties in provisional liquidation. Mr Justice John MacMenamin appointed Kieran Wallace of KPMG as interim examiner to Marino Ltd (Zanzibar), Vikram Ltd (The George), Perfect Pies Ltd (Café en Seine) and Mount St Pub Ltd (Howl at the Moon).