By Andrew Sangster
Redundancies and asset sales appeared to be on the menu at Queens Moat Houses (QMH) this week, as the hotel company moved to pay off some of its debt mountain.
The 25 hotels put on the market by QMH in April looked set to be sold to a management buy-in team, backed by a group of investors, including venture capitalist 3i.
Rumours that a sale was imminent were fuelled as news leaked of a significant number of redundancies at QMH’s head office in Romford, Essex.
It is understood that up to 50 jobs are going as the group tightens its belt and focuses on its core Moat House brand.
Andrew Coppel, QMH chief executive, however, claimed the sale was a long way from reaching a conclusion. “We’re discussing the situation with a number of interested parties,” he added.
When the sale of the 25 hotels does complete, QMH will be left with just three County Hotels – one of which is also soon to be sold – and seven associate hotels. The remaining 42 UK properties will all be branded as Moat Houses.
The asking price on the package up for sale, which includes six Moat House hotels, is above £100m.
It is money that debt-burdened QMH desperately needs as the new management team brings the company back from its collapse in March 1993.
This financial year, QMH must pay £14.3m back to its banks, and next year the figure grows to £30m. In 1998, QMH will have to stump up £50m and the same again in 1999, with a final bullet repayment of the £217.4m balance.
Once up and running, the 25 hotels being sold, through property agent Christie & Co and merchant bank Deutsche Morgan Grenfell, will form a substantial new company. It will easily rank among the 20 biggest hotel operators in the UK by number of bedrooms.
The star businesses will be the Moat Houses. These are: Blackburn (98 bedrooms), Bramhall (65 bedrooms), Ipswich (75 bedrooms), Telford Golf & Country (86 bedrooms), Washington (106 bedrooms) and Woodford, Essex (99 bedrooms).