Value of Montrose Hotel written down by 80%

THE OWNERS of the Montrose Hotel in Dublin have written down its value by almost 80 per cent, or €33 million, to €9 million.

The hotel was bought from the Jurys Doyle group in 2007 at the height of the property bubble. It is owned by Bernard Doyle, Bernard McNamara, David Courtney, Jerry O’Reilly and Terry Sweeney.

In accounts filed recently for Lonnegan Trading Company Ltd, which owns the now closed hotel, the directors say they intend to reopen the hotel once its refurbishment is complete. The accounts were signed by the directors earlier this month.

The hotel closed last January and in April 2010 the owners said they would reopen it as a budget hotel if they could reach agreement with staff and secure financing.

The recently filed accounts are for the 2008 year and record a loss of €33.68 million, with €33 million of this being accounted for by the writedown of the hotel’s value.

The directors of the company are Mr Courtney, property consultant, and accountant Padraig Breen. At the end of 2008, the company had €9.29 million remaining in shareholders’ funds.

The notes to the accounts say provisions have been made against the recoverability of group debtors.

The accounts say the company is reliant on the group’s principal lending institution to finance the refurbishment. This is believed to be a reference to the now-nationalised Anglo Irish Bank.

A 2006 charge from AIB was satisfied the following year and in 2007 Anglo registered a charge against Lonnegan.

During 2008 Lonnegan employed an average of 108 people, at a cost of €2.3 million.

The Lonnegan accounts do not show any bank debt owed by the company. The company is owned by Korelo Ltd. Mr Breen had no beneficial interest in either company.

Accounts for Korelo for 2008 were filed in October 2009 and at that date the company was still valuing the hotel at €41.3 million. “Having considered current market conditions the directors continue to carry financial assets at its [sic] cost of €41,387,724,” the accounts state. Korelo’s directors are Mr Courtney and Mr Breen.

The accounts show the company had loans from its shareholders. The average loan was approximately €950,000 and the total was €4.35 million. During the year all of the shareholders, bar Mr McNamara, advanced loans of €115,375 each.