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Shelbourne Hotel suffers a loss of €156m

One of Ireland's best-known hotels, the five-star Shelbourne Hotel in Dublin, made a staggering pre-tax loss of €156m in 2008 after the value of the hotel property was written down by €155m.

In spite of the writedown, the company that owns and operates the hotel, Shelbourne Hotel Holdings Ltd (SHHL), made an operating profit in 2008, 2009 and 2010.

The figures show that the company recorded an operating profit of €3m in 2008, following an operating loss of €6m in 2007

However, the writedown of €155m resulted in the €156.2m pre-tax loss and this followed a €12m pre-tax loss in 2007.

After the writedown, the hotel was valued at €84m. The company's accumulated losses at the end of 2008 stood at €203.9m.

The hotel was bought for €140m by some of Ireland's best known businessmen in 2004, including Bernard McNamara, Jerry O'Reilly, John Sweeney,David Courtney and Bernard Doyle.

The hotel's owners have been in dispute with the company retained to operate the hotel, Marriott International subsidiary, Torriam Hotel Operating Company Ltd (THOCL) over TOHCL's performance in the 20-year management agreement. In relation to the company's 2008 performance, the directors state that they are "disappointed with the company's results for the year".

The directors state that the carrying value of the hotel property is €90 million "on their belief that this represents the current value of the asset" and they believe "that no further adjustment is required in this regard".

Irish Independent