It looks like Irish taxpayers, via the Irish Bank Resolution Corporation (IBRC), will soon be out of negative equity on the Hilton hotel in Prague, according to accounts for one of Sean Quinn's old companies.
The financial statements for Quinn Group Hotels, which IBRC seized control of in 2011, were recently filed in Dublin. The group accounts are really only comprised of the performance of the Hilton Prague, which had been in the name of Quinn's daughter Colette, until the bank seized his assets.
The accounts detail an impressive performance last year at the 790-bed property, with revenues up by more than €3 million to €49.4 million.
The Quinn loans secured on the property now amount to about €230 million. Meanwhile, the last time the hotel was valued, at the end of 2016, it came in at about €222 million, according to the balance sheet.
Best-performing market
Prague's hotel market is currently one of the best-performing in Europe. A report from PwC in April on the fastest-growing hotel markets predicted that Prague would come in third in Europe for 2018, with 81 per cent occupancy.
PWC also predicted revenues per room in Prague would grow 7 per cent this year, based on an upsurge in Russian visitors. The firm then predicts that, in 2019, Prague will top the European league table on occupancy.
The 2016 hotel valuation is probably already out of date, on the low side. The next time a desk valuation exercise is carried out, chances are the property will be worth more than the loans outstanding.
It is unlikely that IBRC will be able to cash in just yet, however. IBRC will not be able to sell the hotel until after all litigation between the bank and Quinn has concluded. On that basis, Irish taxpayers could have an interest in the Prague hotel market for many years to come.
