@temene

Off-hand I can't think of any quickfire solution

Where's the problem? I presume the NAMA and Certus hotels have EBITDA and throw off some cash.
If they are costing the banks cash they'll close them.

What the "healthy" hotels mean is that they want roomrate to increase so they'll get a "landlord return" above EBITDA for their own properties and spare cash for capex etc. Well tough luck. Your time for lobbying was 10 years ago or whenever the capital allowances game began.

It's a bit more complex than that.

There is a good chance that the banks would get hit for the balancing charge if the asset is closed/sold during it's tax life as the relevant interest in the property would transfer to them if they took security. So it's better to fund operating losses to avoid this.

Plenty of bank hotel are not making any positive EBITDA.

I've long assumed the problem is that NAMA hotels got all the benefits that accrued from running up massive debts (everything from new buildings to high profile marketing) and are now competing with non-NAMA hotels that never had those benefits/never ran up those debts. It is only the bank's forbearance of the debts of the former that is keeping them above water, while the poor suckers across the road - who never got to bling up their hotels - have to try and compete on a level playing field now.

At least, that's my understanding of the underlying beef.

Put it another way. Is their overdraft increasing?
Are you telling me that the Certus chap in London who signs off on lending is letting a Certus hotel's overdraft increase.
The balancing charge thing is bit of a bogeyman. Why would the people who benefited from the capital allowance not be the ones who get hit with the balancing charge?
Genuinely I've no idea. Is there any evidence that a bank has been hit with a balancing charge on a tax break hotel it shut.

As much as they might like to hissyfit, it's tough to make money outside DUblin and Cork at the moment. There are plenty of new provincial hotels that don't and never will make an operating profit.



Very few hotels have shut. The balancing charge thing is odd - it falls due on the holder of the relevant interest in the property when the property is sold or shut - in the case of a bank taking security the general view is that the relevant interest transfers to the bank without a balancing charge to the investors and as such they are liable.

Thanks. If that's the considered opinion so be it.
I'd like to see it challenged. It smells contrary to the overall principles of tax law and insolvency practice for a number of reasons.

Just for clarity: there is no Certus guy in London. The bank in the UK is IBSU - (Irish Bank Support Unit- I think). Certus is a service company in Ireland with a Service Level agreement type contract - though it is run by bankers, who will be handsomely remunerated if they do a good job - the quote from my acquaintance involved - perhaps throwaway was "they can retire from this"

http://www.independent.ie/business/iris ... 63836.html

They're not going to like that over on the pyrite thread....

Uh - is this legal? Is this common? Even if they are owned by the same people is just handing over money from one company to another without any accountability allowed? Surely it is a duty of Directors to ensure a company does not deliberately throw away money or resources?

Please, Justice Kelly, SMITE THEM!

Of course its legal, its only an intergroup company transaction. The holding company would have recoreded an equivalent loss. The key point is that the Dylan lost 1.1m on trading last year.

Just heard that the Shamrock lodge in Athlone has gone into receivership>


edit found a link:
http://www.midlandsradio.fm/news_detail ... s_id=12656

Any link or verification? We don't want to be spreading rumours.

Linkey found, runour was OTT