Moran Hotel Group writes down €406m on value of property and in goodwill

The Moran Hotel Group has written down the value of its properties by €224 million and written off the €182 million in goodwill attaching to its purchase of the Bewleys hotel chain in 2008.

This left the company with an after-tax loss of €353.7 million for the year to the end of January 2012, which compared with a deficit of €48.6 million in the previous year.

This data emerges from the latest set of accounts for T&S Taverns Ltd, the company that operates the 10 hotels in Ireland and the UK. The charges are a legacy of debts associated with Moran's €580 million acquisition of Bewleys Hotels, a deal completed just before the economy and property market in Ireland crashed.

Restructuring
These measures formed part of a wider restructuring of the company's finances, including a new lending agreement this month with its banks after its deal had expired in January of this year. This has had the effect of reducing the group's debt burden from just more than €700 million to about €225 million. The restructuring included a debt-for-equity swap involving its lenders, AIB and Bank of Ireland.

Its other lenders, Bank of Scotland (Ireland) and Ulster Bank, recently sold their combined €270 million loans to Los Angeles-based investment fund Canyon Capital Advisors. Canyon is believed to have paid about €85 million to acquire these loans and now controls 35 per cent of the Irish chain.

The hotel chain is run by Limerick businessman Tom Moran and his family, who will retain a significant shareholding in the business.

Last week, the hotel group said it was “satisfied” that the agreed restructuring with its lenders would “safeguard the future of the group and its 1,200 employees”.

The accounts for T&S Taverns shows it achieved Ebitda (earnings before interest, tax, depreciation and amortisation) of €22.7 million on revenues of €81.4 million.

Turnover for the year rose by 1 per cent.

It is understood the Moran chain has experienced strong trading in the current financial year with revenues about €4.5 million ahead of forecast.