George Best Hotel went into administration owing £15m
ADMINISTRATORS for the George Best Hotel in Belfast have confirmed it went bust owing at least £15.4 million, and they are now considering whether or it will be worth even completing the construction project, never mind opening it as an hotel.
It has also emerged that 59 bedroom investors from around the world put a combined £4,260,062 into the venture.
The Scottish Mutual Building next to Belfast City Hall has been subject of an hotel bid since around 2013.
Liverpool developer Lawrence Kenwright's Signature Living acquired Bedford Hotel Ltd, the registered owner of building, for a reported £6m in 2017. The 83-bedroom George Best Hotel was due to open in 2018 as the first of three Signature Living hotels in Belfast.
But the construction project in the listed building was beset by planning delays.
A winding up petition was initially presented against the company in January 2020, prompting loan firm Lyell Trading to appoint administrators from London-based Duff & Phelps on April 24 2020.
The administrators initially said the lender had intervened “in order to protect its investment and provide a platform from which the hotel can be completed”.
But the latest report prepared for creditors suggests they are be less keen to do so now.
It states that the administrators “continue to assess the viability of recommencing the development of the hotel and whether it will be a viable option to complete the hotel never mind to open and trade the hotel, once complete”.
A subsidiary of the Gloucester-based investment group Blackfinch, Lyell Trading is listed as the secured creditor for Bedford Hotel Ltd. The administrator’s report indicates it is owed £7.2m from a 2018 loan agreement with the company.
Documents filed with Companies House show Mr Kenwright’s financial arrangements with Lyell Trading extend to a number of his properties, including the former Royal Ulster Rifles muesum on Belfast’s Waring Street, which was also once earmarked for a Signature hotel.
The former museum was put up for sale in September 2019 along with the Crumlin Road courthouse, another listed building acquired by Signature Living.
Last month, it emerged that the parent company for some 60 of Mr Kenwright’s business interests went into administration owing at least £112m to unsecured creditors.
In a more detailed report into Bedford Hotel Ltd, the administrators outlined that an estimated £8.2m was owed to unsecured creditors at the end of April.
The creditors include investors who bought individual rooms in the hotel, assured they would receive a return of eight per cent per year for the first three years of the hotel’s operation.
The return was supposed to rise incrementally to ten per cent by year five, with investors given the option of selling the room back after three years.
Duff & Phelps’ report estimates a total of £4,260,062 was invested in 59 bedrooms, averaging at £72,200. But some invested more.
Last year the BBC reported how one investor from Germany travelled to Liverpool seeking to recoup £110,000 from her investment into the George Best Hotel.
The administrators’ report suggests unsecured creditors may only receive 50 per cent for the initial £10,000 they invested and 20 per cent thereafter.
But the report states that the final settlement remains uncertain, with updates to be provided in future reports.
The administration process is currently due to run until April 23 2021.