MWB Group eyes administrator appointment; suspension issues unresolved

By Caroline Salls

Pittsburgh, Nov. 16 - MWB Group Holdings plc will immediately appoint administrators, according to a news release.

MWB said it has filed its notice of intention to appoint two Deloitte LLP insolvency practitioners as its joint administrators.

Despite ongoing dialogue, the company said there has not been a satisfactory resolution to issues related to the suspension of trading in its shares and 9¾% unsecured loan stock due 2016.

In addition, MWB said there is still uncertainty surrounding potential cash receipts.

As a result, and in the absence of any other available facilities, the company said it is or will shortly be unable to meet its debts as they come due.

MWB Malmaison Holdings Ltd. and its subsidiaries and MWB Business Exchange plc and its subsidiaries are not being placed in administration and are expected to continue trading normally.

Listing, trading suspension

MWB Group Holdings announced the suspension of its shares and unsecured loan stock from the Official List of the U.K. Listing Authority and the suspension of trading on the London Stock Exchange on Oct. 31.

In that announcement, the company said it had been in discussions with 75% owned subsidiary MWB Business Exchange plc (BX) regarding whether net payments totaling £8.0 million, previously made by BX to MWB were repayable. The talks also involved £4.8 million of contractual payments due to MWB from BX, which were to be paid to MWB in monthly installments from September 2012 to February 2013.

MWB said BX proposed to offset the remaining monthly contractual payments against the outstanding intercompany loan balance.

As a result of the potential offset and the fact that MWB is reliant upon the continuation of payments from BX in order to meet its debt obligations, the company said its board entered into immediate discussions with its primary lender and the board of BX.

On Nov. 2, BX's board confirmed that it had proposed the offset against the outstanding loan balance.

As of that date, the BX board said the talks had yielded no conclusions.

MWB is a London-based hotel brand owner.

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