Two Warwickshire hotels have been saved from administration in a management buy-out deal brokered in Birmingham.
The Charlecote Pheasant in Stratford-upon-Avon and Brownsover Hall, Rugby, along with 16 other Folio hotels will be run by a new company, Mulbourn Limited.
Mulbourn will continue to trade under the Folio Hotels banner with funding provided by the hotel’s landlords, the management team and private equity, in a deal led by BTG McInnes Corporate Finance in Birmingham.
The deal, which will buy the company out of administration, is expected to save 1,200 jobs around the country.
The new company will be led by managing director Matthew Welbourn and finance director Alan Murray, who held similar roles in the previous company. About a dozen former senior managers will also take a stake in the new company.
The new company is forecasting a turnover of £48?million in its first year of trading.
Mr Welbourn said: “This is the start of a positive new chapter for Folio Hotels. We have reached an agreement over the cream of the properties in the portfolio. They are in great locations and have recently been refurbished at a cost of £35?million.
“There is no doubt that trading conditions will be tough over the next few months. However, we believe we are well poised with an excellent product to combat the current downturn in the economy.”
Iain Lownes, partner at BTG McInnes Corporate Finance in Birmingham, added: “While this was a complex deal because of the number of stakeholders involved, the will of all parties to create a sustainable business carried this to a speedy completion and has preserved a significant number of jobs.”
Established in 2005 with five hotels, Folio had a portfolio of 36 hotels by the end of 2008.
The company was forced into administration at the beginning of December 2008 due to bad timing between the completion of the extensive refurbishment programme and the beginning of the current recessionary environment together with rents which were negotiated at the height of the market.
Advisers included Tony Vaughan of law firm Fladgate. MCR were the administrators.
The hotels which form part of the deal also include Barns Hotel in Bedford, Durley Dean in Bournemouth, Etrop Grange at Manchester Airport, and Harte & Garter Hotel & Spa in Windsor.