Refinancing of Cairn Hotel Group helps fund four-hotel deal with IHG
The Newcastle-based Cairn Hotel Group has completed a £31.5m refinancing deal to include £6.5m of new funds to support further acquisitions and the refurbishment of some of its 21-strong portfolio.
HSBC's Yorkshire and North East Corporate Centre is backing the expansion and improvements being undertaken by Cairn, which will include an agreement with InterContinental Hotels Group (IHG) to refurbish and rebrand four hotels which it will continue to manage.
The company, which employs more than 1,000 people across the UK, owns four hotels in Newcastle, as well as properties in London, York, Edinburgh, Fife, Aberdeen, Doncaster, Carlisle and Manchester. It also owns and manages three Holiday Inns, including Newcastle, Birmingham and Darlington, a Best Western in Aberdeen, a DoubleTree by Hilton near Newcastle Airport, a Hotel Indigo in London and the Mercure Kings Head hotel in Darlington.
Richard Warren, Cairn's finance director, said the strategy of the group was to offer a broad range of hotels for a wide spectrum of customers, from the high end to budget travellers.
"Some of our properties are better suited to a mainstream hotel brand as consumers are typically attracted to larger brands that they recognise and trust," he explained. "That is why we have affiliated with IHG, which gives us a better path to market with some of our properties."
Tony Leech, HSBC Yorkshire and North east senior corporate banking manager, said: "The Cairn Hotel Group is a long-standing customer of HSBC so we are pleased that we have been able to support the company on this latest project. This refinance demonstrates that we are keen to work with expanding businesses that have strong management teams and clear strategies for growth."
An IHG spokesperson said that the company sees the Cairn Hotel Group as "one of its major growth partners" in the UK and it is keen to expand its relationship with the group in the future.
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