Queens Moat to sell off 25 hotels

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The Independent Online
Queens Moat Houses, the heavily indebted hotels group, has put a portfolio of 25 UK hotels on the market which analysts say could fetch between pounds 60m and pounds 100m. The stock market welcomed the announcement and the shares added 2p to 31p yesterday. But the proceeds will still only be a drop in the ocean compared with borrowings which the group revealed last month were still a mountainous pounds 1bn at the end of December.

Andrew Coppel, chief executive, said the portfolio being disposed of comprises 19 hotels branded under the County name and six Moat Houses. Deutsche Morgan Grenfell and Christie & Co have been appointed to handle the sale.

Queens Moat has been steadily running down its interest in country-house- type hotels which do not fit into its core Moat House brand, situated on the edge of towns or on main routes or both. Last year, the group put 16 of its County hotels on the market and sold eight. It has sold a further three since December, including last month's sale of the Europa, near Newcastle-upon-Tyne, which was sold to Stakis for pounds 3.4m in March at the time of its results. The group said then that a further 27 hotels were earmarked for disposal.

Analysts pointed to the similarities between Queens Moats' County hotels and the White Hart chain recently sold by Forte to Regal Hotels. Forte, now owned by Granada since its successful takeover bid, received pounds 122m for White Hart. The County hotels are viewed as better quality, with estimates for their value ranging from between pounds 50m and pounds 60m to as much as pounds 100m.

It is understood that the group is hoping to find a single buyer for the whole portfolio, but has not had any indications of interest as yet. There are no plans to sell any more of the Moat House chain after completion of the latest disposal, which will leave the group with 52 hotels largely under the brand name in the UK. The group continues to own a substantial portfolio in the rest of Europe.

News of the latest plans comes hot on the heels of results showing that pre-tax profits of pounds 42.4m last year replaced losses of pounds 95.2m in 1994. The figures would have been much worse but for pounds 48.8m of interest waived under last year's pounds 1.3bn capital restructuring, which cut borrowings that stood at pounds 1.28bn at the end of 1994.

Stanley Metcalfe, chairman, reported "satisfactory" trading in the opening months of the new financial year. While he was cautiously optimistic about the UK, prospects for growth in Germany and France were not good, he said.

Despite the huge problems still facing the group, the shares have soared since being re-listed at 3p last May following a two-year suspension.