THE group that purchased the Great Southern hotels at Dublin, Cork and Shannon airports four years ago has written down the value of the properties by €43.8 million due to a period of sustained losses.
Documents just filed by CG Hotels Ltd and subsidiaries to the Companies Registration Office show the group recorded pre-tax losses of €46.9m to the end of December 2008 after recording the write-down.
The group purchased the three airport hotels from the Dublin Airport Authority for around €75m in 2006.
The two hotels at Dublin and Cork were subsequently re-branded Radisson SAS and the Shannon hotel became a Park Inn following a management agreement between CG Hotels and the Rezidor Hotel Group.
CG Hotels has written down its properties, valued at €70m at the start of 2008 to €28.5m at the end of the year. This included a depreciation charge of €1.2m.
The group has bank loans totalling €63m and the directors admit that “the group has breached certain banking covenants and is in continued discussions with its bankers with regard to restructuring its debts”.
The directors state that the group “is dependent on the successful restructuring of these loans”. The group also made a separate provision for an impairment of €17.2m due from subsidiary undertakings.
The directors of CG Hotels include Ben Walsh, whose family owns the Poplar Linens business, property developer Ronan McArdle and accountant Alan McIntosh. Patrick Coyle and Robert Bastow are also on the board.
The group’s auditors, KPMG state that the group’s liabilities at December 2008 exceeded its current assets by €65.7m and they state that the conditions indicate the existence of material uncertainties, which may cast significant doubt about the group’s ability to continue as a going concern.
The accounts show that €54.5m of the group’s bank debt was due for repayment after five years in 2007.
However, the entire loan liability of €63m “has been classified as falling due within one year as a number of financial covenants included in the group facility agreement were breached and the directors are currently assessing the future funding requirements of the group and are in discussion with their bankers”.
Ulster Bank and Bank of Ireland are listed as the company’s bankers in the accounts.
The group paid €3.9m in bank interest in 2008.
The owners also invested an additional €18m through non-interest loans to part finance the hotel acquisition costs and provide working capital. The €18m does not have a fixed repayment date, the filings state.
Turnover last year fell 32% from €23.7m to €16m, however, the 2007 figure was for a 16-month period.
Staff numbers declined by 30 in 2008 to 226.
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