Just what exactly is going on at JJW Hotels and Resorts?
The company controlled by Sheikh Mohamed Bin Issa Al Jaber and his MBI Group is currently embroiled in court disputes in France and on the island of Guernsey, the result of which could see properties forcibly sold off.
A court in Paris is due to decide shortly what will happen to JJW’s French hotels. JJW France is going through something called a procédure de sauvegarde similar to Chapter 11 in the United States and administration in the UK. It's financial problems have been well documented in the French press for close to a decade.
Although this has been allowed to go on for number of years, matters appear to be heading to the crunch now after the court invited offers for parts or all of the business.
The French portfolio consists of 10 hotels: four under the three-star Median brand, four under the Amarante name and two luxury five-star properties in Paris.
A source familiar with the process said initially there were more than 80 expressions of interest, which was whittled down to around 50 binding offers in the second round.
Of those, the three front runners are thought to be: restaurant company Groupe Bertrand, which has bid €175.5 million; asset management company Tikehau Capital, which has offered €150.5 million; and private equity firm Lone Star Funds, which has put forward €135 million.
The curve ball is that at the same time Al Jaber may end up retaining ownership thanks to finance assistance from the Carlyle Group.The fate of the company, however, comes down to a judge, who is due to reveal his decision sometime in the week beginning 10 May.
A spokesperson for JJW said: “With regard to JJW France, restructuring supported by the Carlyle Group and shareholders has now been completed, final approval is expected on the 11th May, to the amount of €190 million. This will cover all debt and capital expenditure, plus a significant amount for new investment and remodelling of the hotels.”
A separate legal headache for JJW is a case brought on the Channel Island of Guernsey by Aareal Bank over an unpaid debt of €22 million. JJW Limited is a holding company registered in Guernsey, which according to court documents “holds 99% of the shares in JJW France SA, which in turn owns various hotels and other properties.”
The court found in favour of Aareal Bank and granted its application for a winding up order over JJW Limited.
A spokesperson for JJW said: “JJW Limited in Guernsey is a dormant company. The only claim against it, which is currently subject to appeal, is from Aareal Bank. This claim could be covered as part of the restructuring package if necessary.
“The parent company of the group is JJW Hotels and Resorts Holdings. This company, which is free of any problems, has total net assets in excess of 1.3 billion Euro.”
JJW also has properties in Austria and Portugal. It formerly owned The Scotsman hotel in Edinburgh, but this was placed into liquidation before being taken over by being taken over by the Glasgow-based G1 Group.