K Club may need a digout. Step up FF!

DCon

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Bishopscourt Investments skating on thin ice it seems. Surely FF would not allow the K Club to slip..


DR MICHAEL Smurfit and developer Gerry Gannon are facing huge financial difficulties at the K Club. They are seeking to defer repaying bank loans, amid crippling losses that are expected to continue at least until next summer.

Along with a lot of other luxury golf and hotel complexes, the K Club -- which hosted the Ryder Cup in 2006 -- is struggling amid a major reduction in consumer spending.

The complex, which includes a hotel, country club and two courses, has racked up a loss of €8.1m, with revenues plunging to €13.9m -- down from €20.3m.
The company behind the club, Bishopscourt Investments, is hoping to defer repaying a bank loan of €55m.

The company's accounts said: "Based on projections, the group expects to incur further operating losses in the period to June 30, 2011."

The accounts cover the year ended 2008, but the directors provide an update, saying the economy could prevent the company from getting further bank loans or other funding.

Dr Smurfit holds 51pc of the shares, with the remainder owned by Mr Gannon. Dr Smurfit could not be reached at his offices in Monaco yesterday.
K Club seeks to defer bank loans due to crippling losses - Irish, Business - Independent.ie
 


Aristodemus

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They have cut their costs back to the bone. Two years ago they employed almost 30 greenkeeping staff, now they have 6 to cover the whole complex. The members are already paying over €6500 a year in annual subs and are unwilling to pay more, but will have to. The much lauded "joint ownership" scheme, really a time share scheme, has been a disaster with very little uptake. It's hard to see how it can survive without a massive subvention from Smurfit himself as he and Gannon have fallen out.
 

Aindriu

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Let the damn place fail. It is just another example of how many people lost the run of themselves during the so called 'Celtic Tiger'.
 

DCon

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It's hard to see how it can survive without a massive subvention from Smurfit himself as he and Gannon have fallen out.
The Public purse has deep pockets. No need for DR. S to raid his Swiss bank account.
 

Xiogenes

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Let the damn place fail. It is just another example of how many people lost the run of themselves during the so called 'Celtic Tiger'.
Celtic Tiger has very little to do with it, it has a long history of financial woes.

It is, and always has been popular with wealthy foreign business people - again, nothing to do with the celtic tiger.
 

Aindriu

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Celtic Tiger has very little to do with it, it has a long history of financial woes.

It is, and always has been popular with wealthy foreign business people - again, nothing to do with the celtic tiger.
Then it is elitist and has no place in a true republic.
 

DaveMc

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I know little about the developer Gerry Gannon, but Dr. Michael Smurfit always struck me as a very honourable businessman.

Smurfit must be feeling the pinch though as his new yacht under construction in Italy has been sold on before completion and his ‘Lady Ann Magee 2’ is withdrawn from sale.

It is a real pity that plans by a Cork Green Party member to bring Prince Albert of Monaco to the K Club this year to mark the 25th anniversary of the Irish Library in Monaco were shelved at the 11th hour; such an event would have been a huge boost for the K Club and the entire Irish tourism industry.
 

Sync

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They could bring people in, but the main issue they had was getting the amount of dues paying Irish people. They're simply not out there.

He made a decent profit on the new yacht when he sold it, so I don't think it can really be seen as a weakness at all.

We had a thread here a while ago where a poster represented a guy who had a small private firm which was losing money, so they put their own funds into propping it up. They were complaining at how unfair life was. The answer nearly everyone gave them was "He shouldn't have put his own bloody money into an obviously doomed project".

It's the same situation here. Smurfit and his partners aren't going to throw their own funds into this. Sure defer the loans, as I'm sure the banks will allow given the lack of other options, but it would just appear to be putting off the inevitable.
 

cozzy121

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Every cloud has a silver lining, and the failure of this place would be a fitting footnote to bertie's property bubble.
 

DCon

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Every cloud has a silver lining, and the failure of this place would be a fitting footnote to bertie's property bubble.
The taxpayer will pick up the tab though.

Just add it to the bank re-cap bill.

The bank loans are with Irish institutions and become payable within a year because of a breach of covenants.
 

hiding behind a poster

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They have cut their costs back to the bone. Two years ago they employed almost 30 greenkeeping staff, now they have 6 to cover the whole complex. The members are already paying over €6500 a year in annual subs and are unwilling to pay more, but will have to. The much lauded "joint ownership" scheme, really a time share scheme, has been a disaster with very little uptake. It's hard to see how it can survive without a massive subvention from Smurfit himself as he and Gannon have fallen out.
Best thing about all this is the fall in green fees. It used to be about 360 Euro for a round, now you can get it for as little as 75 Euro at weekends. To put that in context, in 2007 an American could play Bethpage Black, Pebble Beach AND Oakmont, all US Open venues, and still have change from what he'd have paid at the K-Club.
 

Xiogenes

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Then it is elitist and has no place in a true republic.
Could you explicate further - it's a golf course ( plus hotel & club house). If someone wants to pay to hit a ball around a landscaped field with holes in it, surely that is their prerogative..?

Private schools may be elitist compared to a community school, but how is the above elitist..? it is not affecting those who do not attend, and it brings in much needed revenue to Straffan, and surrounding areas in N.Kildare, letting it fail would incur job losses, how would that be beneficial ?
 

MPB

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It cannot be let fail.

It is systemic to Golf in Ireland.
 

Xiogenes

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Every cloud has a silver lining, and the failure of this place would be a fitting footnote to bertie's property bubble.
How ?

Is it jealousy or bitterness that fuels your comments ?
 

johnb

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There's a very negative tone running through this thread. I can't understand why people would be wishing the K-club to fail. I'm sure there are local people still employed there and there are probably many people in the area that derive income from the K-club indirectly (i.e. pubs, hotels, guesthouses etc.) I wouldn't have any great time for Gerry Gannon. He appears to be another developer that grew too big for his boots and is now in trouble. However Michael Smurfit is a real entrepreneur. Jefferson Smurfit was a great company, a world leader in its field and an inspiration to many who wanted to start their own business.

I couldn't ever see myself going to socialise at the K-Club but you can't take away from the fact that it did host the Ryder Cup in 2006 and this was a great success for the K-Club and for Ireland. Whatever about the exclusivity of the place, these guys spent money in developing the club which created jobs and attracted tourists into the country. Anyway I just think it's pretty sad to see people on this thread wishing something like this to fail.
 

Brehon

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Smurfit lost a bucket load with Waterford, he's probably on welfare now. Unless there is a white knight on a white horse with a bag of wad over his shoulder it will probably go under.
 

athlonedub

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Dr MS is a man who dressed up as General Patton on his 60th fancy dress birthday party and the outfit is now on a mannaquin in the clubhouse; where there is a plaque commemorating the dinner which John Bruton had with him on the first evening he was Taoiseach; who sunk millions into getting the Ryder Cup to the event (both personally and at a corporate level). This is about ego not about economics and I'd be amazed if he were to walk away and let it fold or let the banks take over. It's like O'Reilly pumping money into lost causes like Waterford Glass long after it was "logical" or O'Brien weeing half a billion up against the wall on INM shares when it was clearly good money after bad, but for him it was all about getting O'Reilly. These guys - for all their good and bad - are entrepreneurs and there is a lot more ego involved than with your average property developer imho.

As for the K Club itself. Nice course, good venue but the times I have played there, you always got the sense that they were a bit up their own ar**s. Mount Juliette is a better course in my books and a more relaxed atmosphere. (Not that my golf would be up to that much but occasionally its nice to live the sporting dream!)
 

athlonedub

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Smurfit lost a bucket load with Waterford, he's probably on welfare now. Unless there is a white knight on a white horse with a bag of wad over his shoulder it will probably go under.
Are you mixing Smurfit up with Dr AJF O'Reilly??
 


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