Suprise, Unexpected, Never Saw It Coming!

[Ungeared]

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/8467241/Von-Essen-in-administration-after-defaulting-on-interest.html

Von Essen in administration after defaulting on interest

Management of Von Essen Hotels were taken by surprise by the company's banks putting the business into administration.

The Von Essen chain includes some of the finest stately homes and castles in the country including Thornbury Castle (pictured), Cliveden, Ston Easton Park and Ynyshir Hall. Photo: Von Essen Hotels By Jonathan Russell 6:50PM BST 21 Apr 2011

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Lloyds Banking Group and Barclays called in administrators Ernst & Young on Wednesday evening after the hotel group failed to make interest payments on its £250m debt pile.

Although the hotel group had been struggling in the downturn The Daily Telegraph understands management were given little or no warning administrators were about to be appointed.

The administration covers the Von Essen Hotels holding company, Von Essen Hotels Ltd. Most other parts of the business set up by Andrew Davis, have not been put into administration allowing the hotels to operate as usual.

[Bradbury Robinson]

Management of Von Essen Hotels were taken by surprise by the company's banks putting the business into administration.

Lloyds Banking Group and Barclays called in administrators Ernst & Young on Wednesday evening after the hotel group failed to make interest payments on its £250m debt pile.

So they failed to make the interest payment BUT were taken by surprise by the repercussions?

Either they believed they were going to make the payment, but didn't, which is probably worse OR they believed that they'd be charged a £15 overdraft fee and carry on with business as usual!

[man o' the year]

£250 M on 28 hotels seems to equtae to most extreme leveraging.

That averages to nearly £9 million borrowed on every hotel. I realise some are worth more but there a some which are worth a lot less and were likely acquired for less than £2 million. Despite bidders hovering,My link , there must be some doubt whether the full debt could be repaid by sales, especially since few will show balanced books for the last 2 years, revenues of £74 million is indicative of low occupancy and rates.

Edited April 24, 2011 by man o' the year

[onesmallstep]

only a few years back, hotels seemed to go through a fashion of selling their buildings to finance houses and pocketing the money, probably the buildings have now been revalued at a somewhat lower level and the loans required to buy them are somewhat more expensive to service, either that or someones run off with the cash.

[Habeas Domus]

previous threads here

http://www.housepricecrash.co.uk/forum/index.php?showtopic=162706

[athom]

So they failed to make the interest payment BUT were taken by surprise by the repercussions?

Either they believed they were going to make the payment, but didn't, which is probably worse OR they believed that they'd be charged a £15 overdraft fee and carry on with business as usual!

maybe they mean the managers of the hotels not the group or probably it was kept secret from all but a few in the know. Yet another load of people feeling secure in their jobs, maybe a bit of mewing for a new 5 series BMW etc than carpet pulled out from under them in a flash. The more people start to realise this could happen to anyone the better IMO.