The Real Hotel Company’s (RHC) chief executive has insisted the group will continue with its expansion plans, despite the company’s shock share-value plunge last week.
The fall, which saw the Purple Hotels brand owner’s share value crash 22% to close at 7.75p last Thursday was blamed on major shareholder Dawnay Day’s troubles.
Private equity firm Dawnay Day, which owns a 28% stake in RHC, launched a review of its investments this week and promptly disposed of £1.1m worth of RHC shares at a discounted price.
But RHC chief executive Michael Prager told Caterersearch that despite the “drama”, the reality of the hotel company’s debt-free balance sheet is that it is in a stronger position than two years ago.
He added: “I’ve spoken with all our major shareholders and bankers and they understand that what has happened to Dawnay Day is nothing to do with us and their attitude towards the business is the same as it was before.
“It won’t affect our target of 1,000 rooms next year and the overall plan is still to have 40 hotels by 2012.”
Prager said the company’s recent decision to exist from the London market was driven by a desire to pay down debt and a good offer from acquirer Whitbread.
“We fully intend to be back in London sooner rather than later,” Prager added.
The group currently has hotels in the pipeline for Sheffield, Chester, Ipswich Liverpool and Hemel Hempstead.
Dawnay Day reviews investments >>
Real Hotel Company to quit London >>
Whitbread pays almost £20m for three Premier Inn London sites >>
Real Hotel Company launches first Purple hotel in Scotland >>
By Gemma Sharkey
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