Losses mounting at hotels group

Losses continued to mount at the group that purchased the Great Southern hotels at Dublin, Cork and Shannon airports following a writedown of €4m in 2009, figures show.

Documents filed by CG Hotels Ltd and subsidiaries to the Companies Office show the group recorded a pre-tax loss of €7.3m in 2009 following a loss of €46.9m in 2008.

The losses stem mainly from property writedowns of €4m in 2009 and €43.8m in 2008.

The group, including Mayo businessman Ben Walsh, purchased the three airport hotels from the Dublin Airport Authority for around €75m in 2006.

The two hotels at Dublin and Cork were subsequently rebranded Radisson Blu, and the Shannon hotel became a Park Inn.

The accounts, signed off on Jan 19, show that revenues at the group decreased by 26% from €16m to €11.8m in the 12 months to the end of Dec 2009. Bank loan interest charges of €3.9m and a depreciation charge of €1m also contributed to the group’s losses.

The group has bank loans of €63m and directors admit “the group has breached certain banking covenants and is in continued discussions with its bankers with regard to restructuring its debts”. The directors say the group “is dependent on the successful restructuring of these loans”.

A note attached to the accounts states that “subsequent to Dec 31, 2009, the group has incurred further losses on ordinary activities after interest and the current economic conditions create uncertainty over the ability of the group to achieve profitability in the foreseeable future”.