A Yorkshire-based entrepreneur has completed a management buyout of 17 hotels from the troubled Folio Hotels Group.
MCR had been appointed to complete a sale of Folio Hotels and four associated companies, which comprise 36 hotels throughout the
Managing director Matthew Welbourn has bought the company out of administration, and will operate the hotels still under the Folio Hotels banner, run by a new vehicle called Mulbourn.
Mulbourn will be run by Welbourn and finance director Alan Murray. Funding was provided by the hotel’s landlords, the management team and private equity led by BTG McInnes Corporate Finance.
Welbourn said: “This is the start of a positive new chapter for Folio Hotels. We have reached an agreement over the cream of the properties in the portfolio. They are in great locations and have recently been refurbished at a cost of £35m.
“There is no doubt that trading conditions will be tough over the next few months, however we believe we are well poised with an excellent product to combat the current downturn in the economy.”
A number of former senior managers are poised to take a stake in the new company.
Up to 13 hotels not bought out by Mulbourn are to be managed by Bespoke Hotels, a separate company, as the portfolio is carved up. Hotels remained open during the sales negotiations.
Established in 2005 with five hotels, Folio had a portfolio of 36 hotels by the end of 2008.
The company was forced into administration at the beginning of last month due to what has been described as “bad timing” between the completion of the chain’s extensive refurbishment programme and the beginning of the current recessionary environment, together with rents which were negotiated at the height of the market.
