Vincent Tchenguiz’s Hilton London Kensington hotel, which has been at the centre of a legal dispute, has been sold for around £260m.
Cola Holdings, the landlord founded by Monaco-based, Kurdish-born hotelier Bakir Cola, has added the 603-room flagship hotel to its portfolio.
It was initially the trophy asset and largest building in a portfolio of ten UK hotels, which Tchenguiz had been seeking to sell for circa £600m.
Other hotels
The transaction has split the asset away from the other nine hotels, which are located in Cobham, Croydon, East Midlands, Leeds, Northampton, Nottingham, Tewkesbury, Watford and York and are understood to have a combined worth of circa £250m.
The properties are operated by Hilton but were owned by the tycoon’s Zinc Hotels group. The holding companies for the assets were put into administration by their lenders in January.
The secured creditors owed are Fortress Investment Group, Hayfin Capital Management and Bayerische Landesbank.
Financing arrangements put in place in relation to a restructuring in 2014 included a £250m term loan facility between Zinc and the lenders, which was repayable in July 2017.
Administrators AlixPartners had put the hotels back on sale in March after Tchenguiz launched legal action over the portfolio’s collapse into administration.
The relationship between Tchenguiz (pictured) and Hilton has been fraught in recent years. Tchenguiz had tried to sue Hilton subsidiaries for £111m for not maintaining the hotels to a high enough standard under its occupation but was not able to recoup the claim through the courts.
‘Close’ relationship
Tchenguiz also unsuccessfully attempted to replace Zinc’s administrators, AlixPartners, having accused the company of having a “close” relationship with the lenders.
Tchenguiz had initially acquired a stake in the properties in 2002 via a sale-and-leaseback with Hilton for around £335m before buying them outright in 2006, with Hilton agreeing to lease them until 2029.
The acquisition has proved to be a protracted process for Cola Holdings, which has been involved in discussions to purchase the hotel since 2016. Other assets owned by Cola and his family include the Westbury Hotel in Mayfair.
JLL and Savills were appointed by AlixPartners to handle the sale. All parties declined to comment.
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