Hotel group writes down value of airport properties by €43.8m

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 filed by CG Hotels Ltd and subsidiaries to the Companies Office show that the group recorded pretax losses of €46.9 million to the end of December 2008 after recording the write-down.

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

The two hotels at Dublin and Cork were rebranded Radisson SAS and the Shannon hotel became a Park Inn after an agreement between CG Hotels and the Rezidor Hotel Group.

The accounts confirm CG Hotels has written down its properties valued at €70 million at the start of 2008 to €28.5 million at the end of the year and this included a depreciation charge of €1.2 million.

The group has bank loans totalling €63 million 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 state the group “is dependent on the successful restructuring of these loans”.

The filings confirm the group also made a separate provision for an impairment of €17.2 million due from subsidiary undertakings.

The group’s turnover last year was €23.7 million, compared to €16 million in the 16-month previous accounting period.

The directors state that “subsequent to December 31st, 2008, 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”.

The continue: “The group and company are implementing stringent measures to stabilise finances including the deferral of discretionary spend and significant cost savings from major suppliers.”

The directors of CG Hotels include Mr Walsh, whose family owns the Poplar Linens business, property developer Ronan McArdle and Scottish accountant Alan McIntosh.