FRESH CRISIS FOR HISTORIC COAL EXCHANGE
THE administrators dealing with the company behind the historic Exchange Hotel have resigned from their position having concluded the hotel is “onerous” and “unsaleable”.
It leaves the Cardiff hotel’s future and the millions of pounds still owed to creditors in limbo as official receivers or a potential liquidator will now take over, despite assurances from the hotel operator that it will reopen in just weeks.
Kelly Burton and Lisa Hogg, joint administrators at Wilson Fields, stepped down at noon on Wednesday saying they would be unable to recoup monies owed.
The announcement comes days after the Exchange Hotel posted on social media saying that a new reopening was imminent and that the hotel was no longer part of Signature Living.
Signature Living Coal Exchange Ltd, which owns the freehold to the historic Coal Exchange building, went into administration on May 6 owing at least £25m and with just £17 in the bank.
In a letter written to creditors, seen by the Western Mail, the administrators said: “Following the receipt of a revised valuation of the company’s principal asset, namely the Exchange Hotel, Cardiff (“the Hotel”), coupled with additional legal advice with regards to the title position of the hotel, the joint administrators are now of the opinion that the Hotel is onerous and unsaleable.”
Dated July 20, the letter gave creditors five days’ notice that Wilson Fields would apply to the court to wind up Signature Living Coal Exchange Limited.
There are still people who appear to harbour hopes that the hotel business can be rescued. However it is widely considered that the building itself is “worthless” due in part to the massive debts accrued as well as the scale and complexity of the works required. A damning report by the administrators revealed the dire state of the Coal Exchange building which is being held together by scaffolding.
According to the report, carried out by Kelly Burton and Lisa Jane Hogg of Wilson Field Limited, the hotel needs a further £3.5m to complete the works on the hotel.
Those investors who ploughed money into the hotel as “bedroom investors” are thought to be owed around £12.25m but have been disregarded by the administrators as “unsecured” creditors. A group of around 40 bedroom investors had come together, representing more than 10% of the total debt of the Coal Exchange company, to force the administrators to reconsider their classification as creditors.
One Cardiff-based investor, who did not want to be named, said the decision to wind the company up was “a bombshell”.
She said: “I’m always quite prudent with my investments and I saw the Welsh Government giving their support and Cardiff council backing it too. One of the main influences for me was because of that backing.”
Despite the building’s owners going into administration, the separate operating company which runs the hotel on a day to day basis, The Exchange Hotel Cardiff Ops Ltd, was unaffected. The operation of the hotel business itself is still considered viable.
Eden Grove Properties Ltd, a company with a registered address in Cwmbran, has applied to renew the premises licence at the Exchange Hotel which had lapsed while the hotel was closed during lockdown.
The director of Eden Grove Properties, Ashley Govier, is a former Cardiff councillor and cabinet member for environment. It is understood this application is speculative until the formal administration process is completed and The Exchange Hotel Cardiff Ops Ltd are still the operators.