A new legal entity to replace the development company behind the Four Seasons hotel in Ballsbridge is one of the options available to banks which have loaned up to £60 million (€76 million) to the project, according to sources.
Substantial overruns on the £51 million budget originally envisaged for the project has left the developer, Simmonscourt Holdings Ltd, in need of substantial additional funds to complete the project. However, it is not clear whether these funds will be provided and a new entity may now complete construction.
Four banks involved in funding the project have appointed corporate recovery specialist Mr Pearse Farrell, of Farrell Grant Sparks to estimate how much money is needed to finish the 259-room hotel, and how this could best be structured. The main bank involved is ACC Bank with Anglo-Irish Bank, Bank of Nova Scotia and Equity Bank making up the other members of the group.
The banks are understood to have a debenture over the Ballsbridge property, which is said to be very close to completion. Who exactly owes money to the banks was not clear last night.
A group of 10 unidentified Irish investors called the Nollaig Partnership is set to take over ownership of the hotel once construction is completed.
The investors were pre-sold the hotel by Simmonscourt Holdings for a reported £59 million though to what extent payment has been made is not known. The funds to repay the banks will come from the sale.
Simmonscourt Holdings was aiming to make a profit of between £3 million and £5 million from the project depending on the final cost of delivering the completed hotel. How much money it has made is not clear.
The investors have an agreement with the Four Seasons group regarding running the hotel and are partly involved in the project for the tax breaks which apply once the scheme is put in place.
The investors may now have to produce funds to pay for some aspects of the completion of the hotel.
The investor group was put in place by Mr Derek Quinlan, a chartered accountant and former tax inspector with the Revenue Commissioners.
Mr Quinlan is a highly regarded and successful businessman who gives tax and investment advice to some high networth Irish businessmen.
He is a director of the Square Management Ltd, a company associated with the Square in Tallaght and whose directors include builders Mr Ken Rohan and Mr Dominick Glennane, and Mr Noel Smyth, of Dunloe Ewart.
Attempts to contact Mr Quinlan were unsuccessful.
