A four-star hotel business owned by one of the best known family names in the hotel industry has secured a €3.6m writedown on its bank loans.
The 18th century Fitzpatrick’s Castle Hotel in Killiney, Dublin, is owned by Eithne Scott-Lennon, whose brother, hotelier John Fitzpatrick runs two very profitable Fitzpatrick hotels in New York.
Newly filed accounts for the firm that operates the 113-bedroom Fitzpatrick Castle Hotel show that the business struck a bank deal last year that resulted in the multimillion-euro loan writedown. The firm’s banks are listed as AIB and the London-based BlueBay Asset Management LLP.
According to a note attached to the accounts, the company successfully refinanced the business during 2014, giving rise to the €3.6m bank writedown.
Prior to the deal, the firm owed €10m in loans and overdrafts. Crippling interest loan repayments of €282,988 in 2012 and €391,109 in 2011 contributed to the business recording pre-tax losses of €930,458 in 2012 and €384,983 in 2011.
However, the business turned around prior to the bank deal, having returned to pre-tax profit of €513,594 in 2013.
The bank deal last year resulted in an exceptional gain of €3.6m that contributed to the business recording pre-tax profits of €3.8m. The accounts show the refinancing and restructuring of its business resulted in the firm incurring costs of €342,086.
The disclosure of the bank deal follows confirmation that business at Fitzpatrick’s New York hotels remains buoyant.
Last year, John Fitzpatrick’s two New York hotels increased their pre-tax profits by 72% to $4.2 million (€3.75m) as revenues rose by 3.7% to $26.2m based on average occupancy rates of 90%.
According to the directors’ report for the Killiney hotel, the directors are very satisfied with the performance of the business having consolidated the turnover and earnings growth achieved in 2013.
The firm also enjoyed a €317,473 gain last year when it reversed a provision against intercompany debt of €317,473 as the circumstances creating doubt over the recoverability of the debt no longer exist.
Numbers employed by the hotel last year reduced from 115 to 109 with staff costs, including director remuneration, falling from €3m to €2.9m.
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