Puma Hotels secures extension to £323m loan

The immediate future of Puma Hotels has been secured following the announcement that the group has successfully refinanced its loan of £323m.

Agreement has been reached with the Irish Bank Resolution Corporation to extend the company's debt facility until 30 May 2014, with revised covenants to reflect the current operating environment.

Peter Procopis, Puma's director, said that the extension of the loan facilities is "a significant vote of confidence in both the group and the quality of the management team since operational control of the hotel was taken back in April 2012".

In the company's last set of financial results, Puma posted losses of £175m following a year of upheaval for the company with Spanish hotel operator, the Barceló Group, pulling out of an agreement early to operate the 21 hotels.

Puma resumed the direct management of the hotels at the end of April 2012, having previously operated the group prior to the signing of a 45-year lease with Barceló in 2007. The Spanish group agreed to pay a penalty fee of £20.25m for breaking its contract. However, Puma lost annual rent of £30m from Barcelo.

"We are continuing to drive the business forward by concentrating on all the things we are good at, including a good service delivery and good products," added Procopis. "The extension of the debt includes a CAPEX element which we will ensure spending on improving the facilities throughout the portfolio."

Puma Hotels operates 21 four-star provincial hotels including the Lygon Arms in Broadway, Imperial in Torquay and the Majestic in Harrogate. Procopis said that while there are no plans to sell any of the properties to service the debt, it is also difficult to speculate on future expansion of the group.

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