THE OWNERS of Dublin’s five-star Shelbourne Hotel have knocked over €155 million off the value of their investment, according to figures just filed with Companies Office.
The hotel, acquired for about €145 million in 2004 and refurbished over two years at a cost in the region of €125 million, had been valued by Shelbourne Hotel Holdings at €246.3 million in its 2007 accounts.
In accounts for 2008 filed just before Christmas – two weeks after the company was warned it would be struck off for failing to file returns and accounts in a timely manner – the company says the hotel is worth just €90 million.
In notes to the accounts, the directors stated economic uncertainty globally and in Ireland, along with a dearth of substantive property market transaction and the establishment of the National Asset Management Agency “have made it difficult to establish any meaningful or appropriate independent valuations for property-related assets”. However, they believe “no further adjustment is required in this regard”.
The accounts, audited by Horwath Bastow Charleton, are dated December 23rd, 2010.
Shelbourne Hotel Holdings is controlled by developers Bernard McNamara, Jerry O’Reilly, John Sweeney, David Courtney and Bernard Doyle.
The accounts also disclose the outcome of mediation into the protracted dispute between the owners of the hotel and Marriott subsidiary Torriam Hotel Operating Company Ltd, which runs the business.
Shelbourne Hotel Holdings had alleged Torriam had “seriously mismanaged” the hotel resulting in alleged financial loss to the owners. The 2008 accounts disclose that Shelbourne Hotel Holdings secured net proceeds of €2.27 million from the settlement of the proceedings in November 2010. The company said time spent in pursuing the case resulted in costs of €800,000. The company says it depends on the “continuing financial support of the groups’ lending institutions”.
Although its loan facility letter expired in December 2009, the directors said they had not been made aware of any potential cessation in its bank facilities and are in discussion with the group’s lenders.
Separate accounts for Torriam filed last October indicate the hotel is still losing money – recording a pretax loss of €2.89 million in 2009. However, operating profits improved despite a 20 per cent cent fall in turnover to €13.5 million.
