RBS takes its partners in the Le Meridien hotel reshuffle

By Abigail Townsend

US hotel giant Marriott International and a former Le Meridien director will take over six Le Meridien hotels, including Grosvenor House, after striking a deal with their owner, Royal Bank of Scotland.

Marriott International will control the flagship Grosvenor on Park Lane and the Shelbourne in Dublin while Tony Troy, a former Le Meridien UK and Ireland managing director, takes on Le Meridien Russell in London's Bloomsbury, Manchester Palace, York and Leeds.

Mr Troy used to run the four-star Principal Hotels chain before its £255m sale in 2001 to Nomura's principal finance unit, then headed by Guy Hands. The brand was merged with the Le Meridien chain that Mr Hands bought later that year for £1.9bn. The four hotels Mr Troy is taking over were once part of the Principal Hotels chain.

The debt-ridden Le Meridien chain was rocked by the economic downturn and refinancing talks between equity holders and lenders, which include CIBC World Bank, Merrill Lynch and Lehman Brothers, collapsed earlier this year. RBS, which owns 11 hotels, then took back control of its properties.

Two of the RBS hotels, the Grosvenor and the Waldorf, were put into receivership but the process to take them out is now under way. Hilton has control of the Waldorf. Talks continue between RBS and other parties over running the remaining hotels, including a property at Heathrow. A US firm, Fairmont, is thought to be a contender.

Discussions went on between Le Meridien's lenders and Lehman about the US bank taking control of the international properties in conjunction with hotel group Hyatt. But the relationship between Hyatt and Lehman has since collapsed and the lenders are threatening to sell the hotels if Lehman cannot find another partner.

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