Le Méridien reports in
foreign press speculative
The reports concerning the financial state of the Le Méridien
group are purely speculative, according to Le Méridien Phoenicias
general manager Ben Sington.
Le Méridien is expanding its operations in Malta and the group
will be managing a new hotel in Balluta Bay, St Julians.
Several reports have appeared over the past six weeks in The Times and
The Independent of London that suggested the Méridien group was
facing financial difficulties, but Sington told The Malta Financial
and Business Times: "Like all global upscale hotel companies, Le
Méridien has been hit by recent world events. However, recent
press coverage is pure speculation.
"The financial difficulties concern only the acquisition vehicles
of the group, not its operations. Constructive discussions are continuing
with all stakeholders to achieve a new financial structure for Le Méridien,
but it has always been business as usual in the hotels, where our priority
continues to be to provide guests with a superior experience.
"The Le Méridien brand remains strong and continues to grow.
Le Méridien Phoenicia, which is owned by the company, is one
of the Island's leading hotels, and its performance and the strength
of the Le Meridien brand is one of the main reasons why we have secured
the new hotel management contract in St Julians.
"We are not distracted by these events and are looking forward
to the future with confidence in the knowledge that Le Méridien
will soon be one of the largest five star hotel operators in Malta.
A report in The Times of London on 22 June had suggested that the group
had five days to solve its financial difficulties or face bankruptcy.
On Friday, however, according to the newspaper the Méridien group
was thrown a GBP150 million lifeline "The threat of administration
hanging over Le Méridien Hotels receded last night amid indications
that Lehman Brothers is ready to inject GBP150 million into the company
as part of a rescue refinancing."
On Monday The Times reported that the Royal Bank of Scotland was also
helping Le Méridien out: "The Royal Bank of Scotland (RBS),
which is owed GBP20 million in rent by Le Méridien hotel chain
by a deadline of this afternoon, is likely to agree rescheduling of
the payment to try to keep the stricken chain out of administration."
According to The Times report "Talks on the financial future of
Le Méridien continued at the weekend, but by last night had not
reached a conclusion.
"Lehman Brothers, the US investment bank, has emerged as the front-runner
to take control of Le Méridien, but has so far failed to reach
agreement with the consortium of banks that own the company.
"It was thought last night that RBS, which owns the freeholds of
12 Le Méridien hotels under a sale-and-leaseback arrangement,
was likely to reach a compromise on the GBP20 million in rent due this
"Le Méridien, managed by Guy Handss Terra Firma fund,
lacks the cash to pay. Terra Firma, with Alchemy, the venture capital
house, had proposed its own refinancing, but the Lehmans proposal is
thought likelier to be accepted.
Terra Firma said: "Our proposal was based on three principles:
an injection of substantial equity, keeping Méridien including
the RBS-owned hotels together and no writedown of the bank debt.
"Lehman, holding GBP160 million of mezzanine debt in Le Méridien,
is understood to be willing to put up to GBP150 million into it to refinance