As the company's heavily qualified accounts are posted to shareholders, the public relations face is still one of brimming self-confidence. But then with a team of advisers that includes Warburgs to the lending banks and Morgan Grenfell to the company, it would have to be. Agreement on reconstruction proposals is now just days away, insiders insist, and there's every prospect of a happy ending. Well, possibly, but to the outside world the final chapter looks to be at best a miserable one.
The main problem is as it's always been - the position of the first mortgage debenture holders. They have first charge over some of the best hotels in the group including the Royal Crescent in Bath and the Caledonian in Edinburgh.
Under the terms of the debenture, any shortfall in the value of their security has to be met from the group's other assets. So far Morgan Grenfell has done a remarkably effective job in persuading debenture holders to hold fire. Secured creditors do not, however, give up any of their rights lightly; the reconstruction will have to honour their position if it is to win support.
Other lenders are as a consequence going to be left with such poor cover that they must begin to wonder whether it's really worth the candle. At best they face the prospect of massive debt write-offs. Ordinary shareholders can forget it; they would be better off with Russian railway bonds. Not such a happy ending after all.