Malmaison and Hotel du Vin owner suspends shares to work out debt repayment
The move leaves the future of the company, which owns and operates 15 hotels under its Hotel du Vin brand and 12 under Malmaison, hanging in the balance until it can reach a positive outcome with its 75 per cent owned subsidiary.
MWB Holdings was due to release its full-year financial results for the year ending 30 June 2012 yesterday, but requested extra time to post them so it could work out with MWB Business Exchange whether it has to repay its debt of £8m.
Discussions also need to take place over contractual payments of £4.8m that MWB Business Exchange is due to make to MWB Holdings by February next year.
In a statement released last night MWB Holdings said: "BX indicated earlier today that it is proposing to offset the remaining monthly contractual payments against the outstanding inter-company loan balance.
"As a result of the above potential offset and the fact that MWB is reliant upon the continuation of payments from BX in order to meet its liabilities as and when they fall due, the Board of MWB has entered into immediate discussions with its primary lender and the Board of BX."
'Challenging year'
MWB Group Holdings, which admitted it faced a 'challenging year ahead' as it posted its half-year report in March, also reported it had managed to reduce its overall debt to £180m in six months after completing a number of sale and leasebacks of its Malmaison properties.
However, the group, which is due to open its 13th Malmaison in Dundee next summer, warned that the future of the company, owner and operator of 15 hotels under its Hotel du Vin brand and 12 under Malmaison, would be compromised if an agreement could not be reached.
"In the event that these matters cannot be resolved satisfactorily, the Board expects that the value of the Loan Stock will be significantly compromised and that there will be no value remaining for existing shareholders," it said.
