02 July 2003

Search all issues

powered by FreeFind

Send Your Feedback!

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 Phoenicia’s 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 Julian’s.
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 afternoon.
"Le Méridien, managed by Guy Hands’s 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 it."

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Business Times, Newsworks Ltd, 2 Cali House, Vjal ir-Rihan, San Gwann SGN 02, Malta
Tel: (356) 21382741-3, 21382745-6 | Fax: (356) 21385075 | E-mail