Folio Hotels has been rescued from administration in a deal that will see the company split into two, with 13 of its properties taken over by Bespoke Hotels.
The remainder of the group’s hotels will be run by Folio’s existing management team.
Administrators MCR are expected to have the deals completed by the end of the week, in a move that will preserve up to 2,000 jobs across Folio's portfolio.
Bespoke, which runs 11 hotels including London-based members’ club Home House, will take over the management contracts for 13 of Folio's properties, with the remaining 20 properties continuing with the same management team, but a new set of shareholders.
Matthew Welbourn, managing director of Folio Hotels, confirmed the buyout and said the group had been forced into administration after the current financial crisis left it unable to meet lease payments.
Welbourn said: “The economy was the key factor, but it was also the timing of the downturn which came just after the completion of our refurbishments. Secondly we signed fairly punitive lease deals 30-36 months ago when the market was strong, but the market wasn’t there to support the lease values.”
Folio Hotels in administration>>
Half of Folio’s head office staff made redundant>>
Bespoke Hotels in talks to manage nine Folio hotels>>
Folio adds 19 more hotels to its collection>>
By Gemma Sharkey
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