Fri, 30 Sep 2011 | ADMINISTRATION
Royal Bank of Scotland is about to take control of the beleaguered hotel operator, Jarvis Hotels, and implement a pre-pack administration process in an effort to get back debts of £130 million.
RBS, which has partnered with private equity firm Patron Capital, is ready to gain control of 20 freehold properties owned by Jarvis Hotels.
Since defaulting on its loan repayments 18 months ago, Jarvis has been in RBS’s business recovery unit. Rumours have since been circulating that RBS, with a private equity company, will provide new funding for Jarvis. Jarvis is also in debt with other banks including HSBC and Bank of Ireland.
It is understood that the portfolio of hotels will be placed into RBS’s facility for handling its distressed property assets, the West Register vehicle.
John Jarvis, the former chief executive of Hilton International, set up Jarvis Hotels in 1990 after buying 41 hotels from Allied Lyons, in a deal that was the biggest management buy-in ever made at the time. It was then acquired in a £229 million MBO in 2004.
Jarvis Hotels Ltd, owns and runs 30 hotels according to its website, and has about 3,000 employees.
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