A shocking slump in the value of a plush East Kilbride hotel has been blamed in the sale of Macdonald Hotels.
The independent hotel group announced today it to sell 27 properties to a private equity firm for an undisclosed sum.
And a £6.6m write-down on the value of the town's Macdonald Crutherland House hotel is what deputy chairman and group managing director Gordon Fraser claims landed the firm with a pre-tax loss of £1.1m for the year to March 29, 2018.
Macdonald Hotels said the deal, set to complete by the end of August, would clear its bank debt, which stands at around £218m, as well as enabling it to invest in the 11 hotels it will retain.
Gordon Fraser, deputy chairman and group managing director, who has worked with Donald Macdonald for 36 years, said: “Over the past three decades, we’ve received numerous offers for the business, and their frequency has increased considerably over the past year, with a steady stream of serious approaches from the Far East, US and UK, including from UK blue-chip pension funds, which reflects the long term strength of the business.
“We are very pleased to have entered a ten week exclusivity period with a major, heavyweight investor to allow final due diligence and legal work to be completed with the transaction to conclude by the end of August.
“The preferred bidder fits superbly with our ongoing aspirations for the hotels and they will bring significant investment and expansion of the portfolio.”
Macdonald Hotels will offload a portfolio of prestigious properties including the Rusacks hotel in St Andrews; the five star Randolph hotel in Oxford, the five star Bath Spa, and the Compleat Angler, on the banks of the River Thames in Marlow.
The 11 properties Macdonald Hotels will hold onto include the Aviemore Highland Resort and four Monument Leisure hotels, as well as a further nine Macdonald Resorts located in the UK and Spain.
The group employs 2200 people within its hotels and another 190 in a central support team.
Currently, room sales are performing £1.2m ahead of last year, with particular growth from the group’s summer leisure campaign, corporate groups, spa and golf breaks.
