Business Irish

Friday 15 December 2017

Mount Carmel sale will see taxpayer take haircut

Tom Lyons

The taxpayer is facing a loss of tens of millions when Mount Carmel, the Rathfarnham-based maternity hospital, is sold this summer.

An information memorandum prepared by Goodbody Corporate Finance and circulated in the last two weeks seeking prospective buyers reveals that the financial performance of the hospital has declined significantly since the downturn.

Revenues in the hospital have fallen from a peak of €42.5m in 2008 to €32.3m in 2012. The hospital made an operating profit of €2.8m in 2009 before making a loss of €1.6m in 2012.

Prospective buyers have been told by Goodbody to submit indicative bids for the hospital, which is owned by Nama developer Gerry Conlan, by June 14.

The University of Pittsburgh Medical Centre, the owner of the Beacon Hospital in Sandyford; Larry Goodman's Blackrock Clinic; and the Mater Private, majority owned by Seamus FitzPatrick's Capvest, are among the bidders understood to be circling the hospital. St James's Hospital in Dublin is another possible owner after it made a takeover approach for the clinic in the summer of 2012.

Mr Conlan bought Mount Carmel from the Little Company of Mary Sisters in 2006 with a €65m loan from AIB. It is likely to struggle to reach a price of €10m. Any new purchaser is also likely to want to invest another €10m in the hospital.

The hospital has been restructured into a property and an operating company. The operating company has an ongoing obligation to pay the debt-laden property company €550,000 per annum.

Celebrity mothers such as Yvonne Keating have used the hospital's maternity facilities. The hospital employed 400 in 2010 but this is in the process of being reduced to about 300.

Irish Independent

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