Major hotel group in race to refinance £610m by Christmas

Hotel News - 17/06/2010

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The group that owns some of the most historic hotel names in the world is in a race to refinance more than £600 million in lending before next year or it risks falling into the hands of major creditors. The Maybourne hotel group owns three of the UK’s big five-star hotel names: Claridge’s, The Connaught Mayfair, and The Berkeley Hotel. The hotels enjoy colourful histories going back more than a century each. Famous guests from the worlds of royalty, politics, diplomacy and celebrity have stayed at all three of the hotels.

Maybourne needs to refinance £610 million of lending this year or it could be taken over by two key bank creditors, the Bank of Ireland and Anglo Irish Bank. According to the Guardian, Maybourne is discussing a potential refinancing deal with Deutsche Bank. Other lenders are apparently interested and talks seem to be heading in the right direction. The possible refinancing deal could likely see the exit of the two Irish banks.

Maybourne appears to be following in the footsteps of many such highly-leveraged investment vehicles founded and grown in the days of cheap, easy lending. Property experts point out that high-profile properties like Maybourne’s five-star hotel portfolio are relatively resilient. Though they may lose up to 30 per cent of their value, they are somewhere protected, thanks to their value as trophy assets and their dedicated wealthy clientele.

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