THE company that owns two of Newcastle’s most prestigious hotels is to appoint administrators after failing to secure a refinancing of the business.
MWB Group – owner of the Malmaison and Hotel du Vin chains – stressed that its 26 hotels across the two brands would continue to trade normally and were not being placed into administration.
The group operates both a Malmaison and Hotel du Vin in Newcastle.
Shares in the group were suspended on October 31 and investors warned their stakes could be wiped out after its part-owned subsidiary, MWB Business Exchange, withdrew repayments on a £4.8m loan. The temporary office space business claimed it was owed £8m by MWB Group.
Deloitte, which was reportedly drafted in to help the troubled business earlier this week, will be appointed as administrators with immediate effect.
MWB had been developing its hotel business, named after Napoleon’s Chateau de Malmaison, with the intention of selling off the business and returning the proceeds to shareholders.
The Malmaison chain has boutique hotels in city centres across the country. The Newcastle site, in the former Co-operative building on the Quayside, was one of the first to open and is one of city’s best-known hotels.
Hotel du Vin, which was formed in 1994, has smaller hotels based mainly in cathedral or university towns. It opened on City Road, Newcastle, in 2008.
MWB said yesterday that, despite ongoing dialogue, it was not able to resolve the issues and amid uncertainty over the potential cash receipts it was unable to secure other facilities from existing or new lenders.
Earlier this year, Northumberland- based Robert Cook, chief executive of Malmaison and Hotel du Vin, left the company to lead the De Vere Village brand.
Cook began his career with Malmaison as general manager of its hotel on Newcastle Quayside, before rising to the role of chief executive and was instrumental in its expansion during the 2000s.