AIB owed £36m following luxury hotel group admin

A Greater Manchester-headquartered luxury hotel group was forced into administration after a downturn in trade and an unsuccessful legal claim prompted its bank to take measures to recover its £36m lending, it has emerged.

Administrators have also revealed that several potential buyers have expressed an interest in taking over one or more of the group's hotels, which continue to trade as normal.

Ryan Grant, Lee Causer and Catherine Williamson from AlixPartners were called into four hotels owned and managed by Prima Hotels Ltd in May

The hotels are: The Stanneylands Hotel in Wilmslow; Nunsmere Hall Hotel in Northwich; The Quorn Country Hotel in Leicestershire; and Hellaby Hall Hotel in Rotherham. A further appointment was made over the Royal Terrace Hotel in Edinburgh.

A report to creditors said the group's bank AIB Group (UK) took steps to protect its lending in April after negotiations between the two parties broke down.

Based on current forecasts, it is thought the bank could suffer a multimillion-pound shortfall on the secured debt, although the exact amount is not yet known.

Meanwhile Prima Hotels Ltd owes £2.2m to unsecured creditors, Nunsmere Hall Ltd owes £667,164, Fontenhall Ltd (which trades as Hellaby Hall) owes £892,316 and Hallco 1494 Ltd (which does not have a trading name) owes £2.4m. None of the unsecured creditors are expected to receive any money following the administration.

Following the group's collapse, AlixPartners engaged Legacy Hotels & Resorts to operate the hotels. The administrators reported that all bookings have been fulfilled and future bookings will continue to be honoured as they seek buyers for the hotels.

The administrators said: "The value of the hotels will be maximised by selling them as operating hotels, rather than vacant properties. The administrators' strategy is therefore to trade the hotels with a view to formally commencing marketing in early to mid-September 2015 to sell the hotels as going concerns.

"This strategy will also reduce claims from a number of potential creditor groups who could have claimed as unsecured creditors; principally customers who paid deposits and would have had unsecured claims, and employees who would have had preferential and unsecured claims, had trading ceased upon appointment.

"To date, the administrators have been contacted by a significant number of external third parties expressing interest in one or more of the hotels and the administrators remain optimistic that going-concern sales of the hotels will be achieved. Once formal marketing of the hotels commences, these parties will be contacted and invited to submit formal offers."

AIB said it was unable to comment on the story due to customer confidentiality.

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