independent

Wednesday 16 April 2014

Application to have liquidator appointed to Mount Carmel Hospital

Mount Carmel hospital in Dublin

AN application to appoint a liquidator to Mount Carmel Hospital will be made as early as today.

The application is being made by the directors of Mount Carmel in the courts to have a liquidator appointed to the Dublin-based private maternity hospital that employs about 300 people.

NAMA had been supporting the business while a buyer was being sought for it but it is believed that the agency recently decided it could no longer back it.

Property developer Jerry Conlan bought Mount Carmel from the Little Company of Mary Sisters in 2006 using a €65m loan from AIB. While a number of potential bidders had emerged for the hospital, it was widely acknowledged that it would struggle to sell for even €10m.

The hospital had been hopeful up to autumn last year that a buyer would be found.

But Mount Carmel has struggled financially.

Its revenue fell from €42.5m in 2008 to €32.3m in 2012. The hospital made an operating profit of €2.8m in 2009 but a loss of €1.6m in 2012.

NAMA issued a statement today in relation to Mount Carmel.

"Mount Carmel Hospital is an asset securing loans acquired by NAMA," it said.

"The hospital has been incurring significant losses since NAMA acquired the loans in 2010. These losses have been funded by NAMA while it has sought, in conjunction with the debtor, to put in place arrangements which would enable the hospital to operate on a viable basis. Unfortunately, it has not been possible to formulate such arrangements.

"Over much of 2013 and continuing into January 2014, the debtor has sought to sell the hospital but, following extensive open marketing and prolonged engagement with various potential purchasers, including various health enterprises and agencies, it has become clear that a sale at an acceptable price was not possible.  After reviewing detailed financial and operational data relating to the hospital, the Department of Health informed NAMA on December11 2013 that neither it nor the HSE proposed to enter into discussions with a view to purchasing it.

"Given that NAMA's primary objective is to obtain the best possible financial outcome for the taxpayer and given that the sale is not proceeding, NAMA has decided that it can no longer continue to fund unsustainable losses at the hospital.  The Directors of Mount Carmel Hospital have decided to petition the High Court for approval for the appointment of a liquidator to the hospital."

Ailish O'Hora and John Mulligan

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