Hotel du Vin owners face administration

14 November 2012

MWB, the owner of the Hotel du Vin and the Malmaison chains of boutique hotels, is in talks about how to refinance its huge debts with Deloitte lined up as administrators if the talks fail.   The shares have been suspended and are likely to be worthless.  At one point in 2007 the shares were trading at 300p but have fallen to 3p.

One of the main issues is that the company is in dispute with its part owned subsidary MWB Business Exchange about the repayment of £4.8m pound liabilities between the two companies.

Although the company has undergone a number of refinancings it remains highly indebted. New management took over from chief executive Richard Balfour-Lynn and finance director Jag Sing, who stepped down earlier this year.

The firm has been able to hold up revenues at its hotels, but has been unable to find ways of cutting costs, which have eaten into the bottom line. A failed venture into restaurants, called Bistro du Vin by former CEO Richard Balfour-Lynn has also drained around £1.5 million of working capital.

Administration looks  a likely option with the assets of the group sold off to recover some of the monies.  However, there is likely to be little return for unsecured creditors.