Queens Moat sells 25 hotels

Click to follow
The Independent Online
The struggling Queens Moat Houses company yesterday sold 25 hotels for pounds 91.5m to a group of managers backed by Hambro European Ventures. The company has now sold all but 51 of its UK hotel portfolio in an attempt to cut debts.

Wayne Sanderson, an analyst at Merrill Lynch, said the price achieved for the 19 three-star County and six four-star Moat House brand hotels "sounds reasonable". However, he added that QMH still had a long way to go, with around pounds 247m of senior debt to repay by the end of the year 2000.

The 25 hotels sold yesterday have a total of 1,865 rooms, and made operating profits of pounds 11.2m from pounds 42.5m of sales in the financial year to 19 December.

QMH will use pounds 65.5m of the sale proceeds to repay senior debt due this and next year; another pounds 6m will be used to repay junior debt, some pounds 17.5m will be set aside for capital improvements, and the remaining pounds 2.5m will repay creditors.

Andrew Coppel, chief executive, said the sale represented an important step in the group's recovery. "It achieves almost the whole of the group's UK disposal programme in a single step and a significant reduction in the group's debt repayment burden."

Last September, QMH reported that it lost pounds 3.1m in the six months to June, compared with a pounds 700,000 profit a year previously. However, it said it had made satisfactory progress in the second half, helped by lower interest rates. Occupancy in UK managed hotels rose to 70 per cent from 67.8 per cent.

Occupancy levels and room rates in the Netherlands also increased, while performance in Germany fell.

Mr Coppel said prospects for further profits growth remained sound.