Folio Hotels rescued from administration

Folio Hotels appears to have been rescued from administration by a management buy-out.

New company Mulbourn plans to trade under the Folio Hotels brand and provide funding to 18 of the group's UK properties.

Mulbourn's management buy-out covers 18 of Folio Hotel's 36 properties and the deal is projected to save 1,200 jobs.

Folio Hotels went into administration in December due to "bad timing between the completion of an extensive refurbishment programme and the beginning of the recession together with rents that were negotiated at the high end of the market", according to Mulbourn director of sales Nick Greaves.

"The company's long term plans to ride the storm through renegotiated rents were dashed when talks failed to reach a satisfactory conclusion within the timescales available and as a result the management team had to call in the administrators," said Greaves.

The new company is forecasting turnover of £48m in its first year of trading.

"It is very much business as usual as we are keen to build our relationships with booking agents and travel management companies," said Greaves. "We will be honouring our existing bookings and will maintain commission at previous levels."

Mulbourn is led by managing director Matthew Welbourn and finance director Alan Murray, both of whom held similar posts at Folio Hotels, which was established in 2005.