Saudi prince eyes Meridien hotels rescue

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The Independent Online

Prince Al-Waleed bin Talal, the billionaire Saudi investor, has emerged as a possible last-minute saviour of Le Meridien, the debt-laden hotels group.

It is understood that the prince is in talks with Le Meridien's shareholders about injecting fresh capital into the company which has been brought to its knees by the downturn in international travel after September 11.

Le Meridien declined to comment but sources close the company indicated that the prince was interested in playing a part in the rescue of the hotels group, which owns prestige names such as the Waldorf in London and the George V in Paris.

The group was bought for £1.9bn in 2001 by a consortium of investors including Nomura, whose private-equity business was then led by Guy Hands, and Alchemy Partners, another venture-capital group. The problems of the company represented the first major failure for Mr Hands, who went on to set up Terra Firma Partners, which manages the investments made by him on Nomura's behalf.

The possibility of support from the billionaire Saudi prince came as Le Meridien issued a statement saying it had agreed an "interim solution" with stakeholders, extending the standstill agreement on its £740m debts.

The hotels group has also paid a reduced rental payment of £4m to its landlord, Royal Bank of Scotland. This has bought time for the major lenders, which are Lehman Brothers and a 14-strong banking syndicate. They can now extend the deadline for concluding the restructuring until 16 July. An unspecified new facility for working capital has also been agreed to tied the company over.

"Ongoing positive discussions with key stakeholders encourage the board to believe that the future of the group should be secured in the face of difficult circumstances," the company said. "The underlying operating performance of Le Meridien has been as a good as, if not better than, many competitors."

If Prince al-Waleed does invest in Le Meridien, it would add to a string of high-profile stakes he has taken in major companies. His biggest success came in 1991 when he started buying shares in Citicorp, the US bank that had been laid low by huge losses on New York property and third world debt. Amid fears it might go under the prince bought a 9.9 per cent stake at a knock-down price. The bank soon recovered and, under the Citigroup name, became a global powerhouse once more.

His Riyadh-based Kingdom Holdings has also acquired stakes in many of America's best-known businesses, including Coca-Cola, Gillette, Walt Disney and McDonald's.