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Future of MWB Group uncertain as shares suspended

01 November 2012 by

The future of the MWB Group, parent company of Malmaison and Hotel du Vin, is uncertain following the announcement that its shares have been suspended from the London Stock Exchange.

Last night's news highlights the precarious nature of the heavy debt the company carries. The current suspension to the trading of its shares is due to an outstanding loan of £8m - now repayable - which it owes to a subsidiary company MWB Business Exchange, the service office company.

Meanwhile MWB Business Exchange also owes its parent company £4.8m in contractual payments, which were due to be paid between September this year and February 2013. It has been proposed that the remaining monthly payments are offset against the inter-company loan.

However the MWB Group relies on the regular payments from MWB Exchange to meet its liabilities.

The publication of the company's annual results, due yesterday, have now been delayed.

The company's half year results, published for the six months to 31 December 2011, highlighted that a £100m reduction in debt and a restructuring of the management team at Malmaison and Hotel du Vin - led by the appointment of a new chief executive of the two hotel brands, Gary Davis - were expected to help the company through a difficult year ahead.

The sale and leaseback of five hotels and the refinancing of Malmaison and Hotel du Vin in 2011 resulted in a reduction of the company's debt to around £180m.

Earlier this year, Richard Balfour-Lynn, who founded the MWB Group as Warwick Balfour Properties 30 years ago, resigned as chief executive.

Balfour-Lynn steps down as chief executive of Malmaison and Hotel du Vin's parent company

Reduction in debt will help Malmaison and Hotel du Vin through 2012 >>

Malmaison to expand into suburban locations >>

Gary Davis aims to put stamp on Malmaison and Hotel du Vin with six new hotels >>

By Janet Harmer

E-mail your comments to Janet Harmer here.

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