Restructuring and Financing for Luxury Country Hotels

21st November 2023

Chris Whitney

St Andrews view
Chris Whitney

Chris Whitney

Enness recently successfully facilitated the restructuring and financing for a portfolio of four large luxury country hotels situated across Scotland and the North of England. The client, an Ultimate Beneficial Owner (UBO), sought our assistance in re-banking their businesses due to the exit of the incumbent bank from the market, leading to the sale of their loan book to a US-based investment company. Dissatisfied with this arrangement, the client desired a closer relationship with a new financial institution and aimed to increase the loan amount from under £5 million to nearly £10 million.

The client had certain objectives, which included re-banking with an institution that would foster a closer relationship and increasing the loan amount to support their development and green energy initiatives. The estimated property values were around £20 million.

Enness was able to help the client achieve their goals. The client's need to complete a development project and install green energy equipment in one of the buildings drove their request for re-banking and a higher loan amount. The loan amount was interest-only and would be repaid through the sale of the properties eventually. The team negotiated nil early redemption penalties to provide flexibility in the repayment process. They also agreed upon an interest rate of 1.9 over the base rate.

Although the formal valuations came in lower than expected, the bank demonstrated flexibility and honoured the initially agreed-upon terms, reflecting their commitment to the client's objectives. The client now enjoys the benefits of having a dedicated team at one of the UK's most prestigious private banks, which fosters a closer and more personalised banking relationship.

This successful case exemplifies our ability to navigate complex financial landscapes, meeting the unique needs of our clients. By restructuring the financing for these luxury country hotels, we secured a more suitable banking relationship and facilitated the client's vision for property development and sustainable energy initiatives.

Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.

Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.