Le Meridien adds two KSA properties

Despite recent uncertainty over the hotel group’s future, Le Meridien continues to add more hotels to its regional portfolio.

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By  David Ingham Published  July 31, 2003

Le Meridien Hotels & Resorts has added two properties to its Saudi portfolio, in Medinah and Taif. With the additions, the company now manages five hotels in the Kingdom and 25 in the Middle East and West Asia region.

The new announcements come just as long running negotiations to rescue the entire group from bankruptcy appear to have reached a conclusion. News emerged this week that Lehman Brothers and Hyatt Financial Corp. are close to an agreement with creditor banks to refinance 126 of the company’s hotels.

This uncertainty doesn't seem to have perturbed the Saudi Ministry of Finance, which owns the two properties. Le Meridien will be taking on a 189 room hotel on the outskirts of Medinah and a 111 room property in Taif. The group already manages the 329 room Le Gulf Meridien Al Khobar, the 284 room Le Jeddah Meridien and the 231 room Le Majd Meridien Makkah, which was added in June.

“We expect to announce further properties in Saudi Arabia within the next 12 months,” says Sami Zoghbi, managing director of Le Meridien Middle East and West Asia.

The rescue deal involving Hyatt emerged after a proposal by Saudi Prince Alwaleed bin Talal to save the group was rejected. Under the new plan, Le Meridien will continue to have its own management and there are no plans for any Le Meridien hotels to become Hyatts or vice versa.

11 UK-based hotels will, however, leave the group. Royal Bank of Scotland, a major creditor, decided not to support the rescue deal and has advised Le Meridien that it intends to take over control of the properties.

“The Board of Le Méridien has sought at all times over the past several months to encourage all stakeholders to invest in the long term future of our business and to resolve the future ownership and financing structure,” Stephen Alexander, CEO of Le Meridien, said in a statement.

“Whilst it was our preference that the final outcome would see the group remain together, it is nevertheless good that we now have greater clarity on the future structure and, in particular, to know that we have the continuing support of our lenders.”

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