Four Seasons firm involved in Budapest project

The firm which put together the investors behind the £60 million (€76.2 million) Four Seasons Hotel in Ballsbridge, Dublin, is involved in providing Irish backers for a five-star hotel in Budapest.

It is not known if some investors are involved in both projects, which are being put in place by former Revenue inspector Mr Derek Quinlan.

The Budapest project involves the renovation of one of the most famous buildings in Hungary in a deal believed to involve up to £80 million.

Parties other than the investors brought together by Mr Quinlan are understood to be involved.

The Gresham Palace in Budapest is an art nouveau building constructed in 1906 by the Gresham Life Assurance Company for the British aristocracy.

In the centre of the city, it overlooks the Danube and Budapest's chain bridge.

It was known as one of Hungary's most luxurious residences in the early part of the century but fell into disrepair after the second World War when the communist government handed the apartments over to new tenants.

An underground car park will be built after which the complete renovation of the building will begin.

As is the case with the Ballsbridge hotel, it will be owned by Irish investors but run by the Four Seasons group. The hotel is expected to open for business in April or May 2002.

The building was sold to the syndicate by the city of Budapest in January 1999 following the failure of an earlier deal involving an Indian hotel chain and a Hungarian hotel operator.

An issue which complicated the earlier deal was the relocation of residents in the building.

The Four Seasons Hotel in Ballsbridge is scheduled to open in February following agreement by a number of parties on the funding of the project's completion.

The hotel was originally scheduled to open this February but ran into delays and budget overruns.

A receiver, Mr Pearse Farrell, was appointed to the two development companies involved, Harvard Properties and Simmonscourt Holdings, in August and is now working to ensure the project's completion.

It is understood that an arrangement involving £3 million from the proceeds of the hotel between Harvard Properties and another company, Marlast, is impeding completion of Mr Farrell's financial package.

Harvard and Marlast have common directors - the former ACCBank chairman Mr Dan McGing and financial adviser Mr Barry Kenny.

Marlast is owned by Rhea Investments, a company registered in the British Virgin Islands.

Some banks involved in financing the Ballsbridge project were unaware of a charge created by Harvard which would have given £3 million from the proceeds of the sale of the hotel to Marlast.

The arrangement is understood to have been part of a mechanism to buy out a previous interest Mr Kenny had in the project.

The investors put together by Mr Quinlan, who are to buy the hotel upon completion, have agreed to pay a higher price than the £60 million originally agreed, as part of their contribution towards completing the hotel.

The Four Seasons group is also making a contribution.

The banks will also have to carry their part of the budget overrun, which could be as high as £20 million. ACCBank was the lead bank involved in the deal.

Other banks involved are Anglo-Irish Bank, Bank of Scotland Ireland and Scotia Bank. Bank of Scotland Ireland has initiated legal action against ACCBank arising out of its handling of the project.