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Savoy in jeopardy if business does not improve

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(Credit: Reuters) The image is the iconic front edifice of the Savoy Hotel with one of its doormen.The Savoy Hotel
October 11
9:19 AM 2013

The ownership group of five star London hotel Savoy had admitted it would be risking the breach of the terms of its outstaning bank loans should operating results do not improve in the near term. Part of the ownership group is Saudi billionaire Prince Alwaleed Bin Talal as well as a Lloyds banking group unit.

Breezeroad Ltd had forwarded its concerns to Companies House. It said, "This risk represents a material uncertainty which could cast significant doubt to the group's ability to continue as a going concern."

Bloomberg had reported that the board of directors of Breezeroad had prepared its financial projections. It assumed improvements in the business climate as well as prepare for the continued compliance by the Savoy of its debt burdens, according to the documents filed.

Should the financial projections be unmet, then the exiting loans of the company would become immediately demandable. This would result in tremedous cost cutting at the hotel in order to avoid defaulting on its loan obligations, according to the Bloomberg news report.

The hotel had declared a pretax loss of GBP53.5 million or USD85 million in 2012. A year later, revenues had risen by 3.5% to about GBP58.5 million.

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