Bankrupt Room Mate Hotels is close to selling itself to a new ownership group.
The Spanish chain has struggled over the course of the COVID-19 pandemic and officially declared bankruptcy at the end of June with the plan to complete a sale. The new owners according to multiple reports in the Spanish press will be alternative investment firm Angelo Gordon and Westmont Hospitality Group.
The offer on the table is €57 million, according to Okdiario, with PwC conducting the sale of the assets. The potential new owners will offer financial support as well as keeping almost 600 people employed.
End of an era
Should the deal go through it will mark the end of one chapter for the hotel company, which has strived to set itself apart in recent years from its more corporate competitors.
The company was founded in 2005 by Olympic equestrian Kike Sarasola and grew to a portfolio of 28 hotels with 2000 rooms. It also operated an extended stay apartment brand called Be Mate.
Speaking last year, Sarasola explained just how difficult it was at the hight of the funding to access funding.
““[W]e cannot borrow more from the banks because in our sector they do not give money, so getting this credit, with market conditions for a debt like this has been very complicated,” he said.
Room Mate’s problems were also exacerbated by an apparent falling out with minority shareholder Sandra Ortega, daughter of the billionaire founder of clothing company Inditex Amancio Ortega.
Ortega put her stake up for sale in 2021 and this year tried to evict Room Mate from two hotels she owned in New York and Miami.
New owners
At this stage it’s difficult to know what direction the new owners plan to take Room Mate in, but both have a long track record of hospitality investment.
Angelo Gordon has an extensive portfolio of hotels. In 2019 it closed on a deal for five hotels in Paris and it bought a hotel in Hong Kong with joint venture partner Weave Living for $115 million.
Owner-operator Westmont Hospitality Group also has a long track record. Last March it agreed a deal with Invesco Real Estate that will see it take over the operations of a portfolio of 13 IHG branded hotels in Germany and the Netherlands.
Hospitality Insights contacted Room Mate, Angelo Gordon and Westmont Hospitality but is yet to hear back.