Active Portfolio

Emporium 7.5% 2020

The Emporium 7.5% 2020 is arranged and managed by BlackBee Investments. The Bond is secured by an unencumbered First Legal Charge on the property and business of The Castle Complex, Glanmire, Co. Cork, and The Hunted Hog, Castlemartyr, Co. Cork. 

About this bond

The Emporium 7.5% 2020 – Income Option provides for an annual return of 7.5% after each event date paid annually and full return of capital on maturity date.

To progress their business model, Emporium Hospitality is acquiring two Co. Cork pubs of which they have an intimate knowledge: The Castle Complex, Glanmire, and The Hunted Hog, Castlemartyr. Given the knowledge gained from involvement to date in the assets, Emporium Hospitality is confident in maximising the potential of each location.

The Castle Complex comprises a substantial multi-occupancy, commercial complex that is currently occupied and trading. The complementary mix includes a public house (Castle Tavern), Paddy Power bookmakers (remaining unaffected) and Firgrove services. This popular location is complemented by its close proximity to the recently opened Lidl store and adjoins the Sarsfield GAA Club and playing pitches.

Recently renamed and formerly known as Pat Shortts, The Hunted Hog in Castlemartyr does a consistent trade and benefits from its close proximity to a number of hotels in the East Cork area, most notably the Castlemartyr resort. A rustic bar, with a warm and friendly atmosphere, it is the main bar in the town.

Investment Profile

Investment Start Date: July 2017

Target Exit Date: July 2020

Asset Managers: Emporium Hospitality

Bond Notional: €2.14 million

Investment Highlights

Bond Notional: €2,140,000 & LTV 80%
Bond National: €2.14 million
Investment Term: 3 Years
Advance to Property Company, which will own the Assets
Total Assets Valuation: €2,675,000 (The Castle €2.1m, The Hunted Hog €575k)
Exit after three years to be achieved from refinance of the assets

The Emporium Company is one of the largest hospitality operators in Cork. The company operates four well-known bars around Cork City, with locations focused on residential areas that provide a wide choice of dining, bar, and entertainment experiences.

 

The management team in Emporium Company is highly experienced in the hospitality and service sector, having previously owned and operated numerous other venues.

 

Consolidated trading performance for 2019 and into 2020 was largely on budget and meeting expectations. Both properties have shown improvement in cost management and margins. The Castle is the larger property, primarily focused on its beverage offering, and has performed strongly. The Hunted Hog has a greater mix of food and beverage and the operator has continued to introduce various initiatives to drive turnover.


With the upcoming maturity of the bond in July 2020, the operators had successfully secured refinancing loan offers from a number of lending institutions and were negotiating on these. The consistent and robust trading performance of the properties and the strength of the operators indicated that a successful refinance would be achieved.


However, in line with government directives to contain the spread of Covid-19, both premises were closed over the weekend of 14th March and will remain so until the government clarifies social distancing requirements for licensed premises. An extended period of closure is anticipated at this point.

BlackBee is in continuous contact with the operators and the current situation will impact on the refinancing of the bond. Redemption will not occur on time at scheduled maturity. The operators remain engaged with their funding partners, who continue to express interest in providing new refinance facilities. We are satisfied that both properties represent strong collateral security and that the operators have the experience and skills required to successfully manage the full refinance of the bond. We take further comfort from the wider group portfolio of The Emporium Company, which has banking relationships with a number of pillar banks.


A review of cash position and projections for remainder of year is currently underway. A financial information pack has been received, which shows limited capacity to fully fund the final coupon due on 1st July 2020. This will impact on the original coupon projections for this product.

 

Further financial information has been requested and an extension of the bond will be required. We are in continuous communication with the operator on this matter and will continue to issue updates to investors when negotiations with operator conclude. Further correspondence is due to issue by 8th May 2020.

Want to know more?

Investors: For information about how to invest contact your Financial Advisor.

Financial Advisors: Please contact @blackbee.ie or call on 021 123 4567